223 
C42 


Legal  Memoranda 


Relating  to  Enemy  Patents  Sold  by  the  Alien 

Property  Custodian  to  The  Chemical 

Foundation,  Incorporated 


T 
225 


This  book  is  DUE  on  the  last  date  stamped  below 


"' 

AUG  2 : 


Form  L-9-5m-12,'2i 


Southern  Branch 
of  the 

University  of  California 

Los  Angeles 


Form  L.  I 

223 
C42 


\ 


CALIFORNIA, 

LIBRARY, 

l_OS  ANGELES,  CALIF. 

Legal  Memoranda 


Relating  to  Enemy  Patents  Sold  by  the  Alien 

Property  Custodian  to  The  Chemical 

Foundation,  Incorporated 


Submitted  in  connection  with  testimony  of  Fran- 
cis P.  Garvan  (President  of  the  Chemical  Foun- 
dation, Incorporated)  before  a  subcommittee  of 
the  Senate  Committee  on  the  Judiciary,  67TH 
Congress,  2D  Session. 


Printed  for 

The  Chemical  Foundation,  Incorporated 

1922 


T 


In  response  to  numerous  requests  for  copies 
of  these  memoranda  filed  with  the  Senate  Com-' 
mittee,  this  pamphlet  is  printed.  Minor  clerical 
errors  and  inaccuracies  in  the  text  have  been 
corrected,  and  some  slight  rearrangements  have 
been  made  in  order  to  consolidate  the  four  docu- 
ments  under  one  cover. 

THE  CHEMICAL  FOUNDATION,  INC. 


New  York  City,  July  1,  1922. 


TABLE  OF  CONTENTS 


PART    I  PAGE 

History  of  Amendment  to  Trading  with  the  Enemy  Act  giving  Alien  Property  Custodian 

general  power  of  sale,  and  of  Amendment  giving  him  right  to  seize  patents 5 

1.  The  custodian  a  mere  conservator  under  Trading  with  the  Enemy  Act  as  originally 

enacted 5 

2.  The  President  and  Custodian  given  unlimited  power  of  sale  by  Congress 6 

3.  Power  given  to  seize  and  sell  patents 8 

PART  II 

Laws  and  Executive  Orders  under  which  the  Alien  Property  Custodian  seized  enemy  patents 

and  sold  certain  of  same  to  The  Chemical  Foundation,  Inc 11 

1.  Laws  (Trading  with  the  Enemy  Act) 11 

(a)  Power  of  Sale  under  the  original  Act  and  as  amended 11 

(b)  Property  subject  to  sale  under  original  Act,  and  as  amended 12 

2.  Executive  Orders 13 

(a)  President's  power  of  supervising  sales  delegated  to  Frank  L.  Polk 13 

(b)  Sales  to  Foundation  authorized  by  Mr.  Polk 13 

(c)  Custodian  makes  sales 14 

(d)  Confirmatory  action  by  President  and  Custodian 15 

3.  Decisions  of  United  States  Supreme  Court  on  Trading  with  the  Enemy  Act 15 

PART  III 

Rights  of  Enemy  Nationals  as  to  property  sequestrated  by  Alien  Property  Custodian 18 

1.  Rights  under  the  Act 18 

2.  Rights  under  the  Treaties  of  Peace 19 

(a)  The  Peace  Resolution 20 

(b)  Treaties  of  Versailles,  St.  Germain  and  Trianon 20 

3.  Method  of  settling  war  claims  heretofore  followed  by  the  United  States 22 

PART  IV 

The  Patent  Convention  of  1909  between  the  United  States  and  Germany,  and  its  repugnancy 

to  the  spirit  of  our  patent  law '.  24 

APPENDIX 

1.  Excerpts  from  Trading  with  the  Enemy  Act  and  Amendments  thereto 31 

2.  Executive  Orders  and  Excerpts  theref orm 44 

(a)  Executive  Order,  Oct.    12,  1917 44 

(b)  Executive  Order,  Feb.  26,  1918 45 

(c)  Executive  Order,  Dec.     3,  1918 46 

(d)  Executive  Order,  Feb.  26,  1919 47 

(e)  Executive  Order,  April    5,  1919 49 

(f)  Executive  Order,  Feb.   13,  1920 51 

3.  Assignment  from  Alien  Property  Custodian  to  The  Chemical  Foundation,  Inc.,  April  10, 

1919 52 

4.  Confirmation  and  ratification  of  certain  sales  and  conveyance  in  confirmation  and  ratifica- 

tion of  the  same  by  the  Alien  Property  Custodian  to  The  Chemical  Foundation,  Inc., 

March  1,  1921 55 

5.  Patent  Convention  between  the  United  States  and  Germany,  1909 59 


PART  I. 

HISTORY  OF  AMENDMENT  TO  TRADING  WITH  THE  ENEMY  ACT 

GIVING  ALIEN  PROPERTY  CUSTODIAN  GENERAL  POWER 

OF  SALE,  AND  OF  AMENDMENT  GIVING  HIM 

RIGHT  TO  SEIZE  PATENTS. 

1.  The  custodian  a  mere  conservator  under  Trading  with  the  Enemy 
Act  as  originally  enacted. 

During  the  period  intervening  between  the  outbreak  of  the  war  in 
Europe  and  the  declaration  of  war  by  the  United  States,  the  operation  of 
the  armies  in  the  field  had  been  only  a  part  of  the  forces  engaged  in  the 
great  struggle.  The  Allies  had  necessarily  developed  and  applied  to  the 
enemy  all  possible  economic  pressure.  In  both  France  and  Great  Britain, 
sequestration  acts  had  long  since  been  in  force  exerting  their  power  in 
the  common  cause.  It  was  but  natural,  therefore,  that  following  our  entry 
into  the  war,  before  an  American  army  in  the  field  could  become  a  realized 
fact,  Congress  should  by  legislative  enactment  place  beyond  the  control 
and  use  of  the  enemy,  all  enemy  property  in  this  country  and  compel  it  to 
serve  in  war  against  its  former  owners.  On  October  6,  1917,  the  "Trading 
with  the  Enemy  Act"  was  enacted,  its  main  purposes  being  threefold: 

(a)  To  prohibit  trade  with  the  enemy. 

(b)  To  impound  enemy  funds  for  war  financing. 

(c)  To  sequester  and  conserve  enemy  property  in  the  interest  of  the 
United  States  or  the  persons  ultimately  entitled  thereto  for  Congressional 
disposition  after  the  end  of  the  war. 

The  first  two  have  no  place  in  this  discussion.  The  third  applies  to 
the  sequestration  and  conservation  of  enemy  property,  and  to  its  ultimate 
disposition,  as  covered  in  Section  12  of  the  Act.  An  examination  of  this 
section  discloses  that,  while  Congress  had  in  mind  the  conservation  of  the 
property,  such  conservation  was  provided  not  only  to  prevent  loss  or  injury 
to  the  property,  but  also  to  the  end  that  its  value  might  be  made  available 
to  the  United  States  in  the  settlement  of  claims  growing  out  of  the  war, 
if  it  elected  so  to  apply  it. 

That  this  latter  consideration  was  present  is  apparent  from  the  specific 
provision  of  the  sixth  paragraph  of  Section  12  of  the  Act: 

"After  the  end  of  the  war  any  claim  of  an  enemy  or  of  an 
ally  of  enemy  to  any  money  or  other  property  received  and  held 
by  the  Alien  Property  Custodian  or  deposited  in  the  United  States 
Treasury  shall  be  settled  as  Congress  shall  direct." 
5 


6 

This  intent  of  Congress  is  further  evidenced  by  the  rejection  of  the 
so-called  Hill  Amendment.  This  amendment  was  offered  on  the  floor  of  the 
House  and  was  intended  to  alter  the  original  Act  so  that  after  the  end  of 
the  war,  upon  proof  of  ownership,  the  former  owner  could  recover  his 
property  as  Congress  should  direct.  The  adoption  of  this  amendment 
would  have  made  the  Act  a  declaration  of  trust  in  behalf  of  the  enemy 
owner.  (Cong.  Rec.  July  11,  1917,  p.  4985.)  Nowhere  in  the  Act  does 
Congress  declare  an  intention  to  return  enemy  property,  but  it  does  un- 
equivocally recognize  the  fundamental  right  of  the  United  States  as  a 
sovereign  power,  in  the  event  of  war  to  take  and  use  as  it  sees  fit  enemy- 
owned  property  within  its  borders. 

That  the  Custodian's  duties  under  the  original  Act  were  merely  those 
of  conservation  pending  final  action  by  Congress  is  clearly  indicated  by 
that  part  of  Section  12  which  gives  the  Custodian  power  of  disposition  and 
sale  only: 

"If  and  when  necessary  to  prevent  waste  and  protect  such 
property  and  to  the  end  that  interests  of  the  United  States  in 
such  property  and  rights,  or  of  such  person  as  may  ultimately 
become  entitled  thereto  or  to  the  proceeds  thereof  may  be  pre- 
served and  safeguarded." 

It  will  be  borne  in  mind  that  the  sequestration  of  enemy  property 
had  never  before  been  carried  out  in  this  country  on  such  a  large  scale. 
There  had  been  confiscatory  measures  directed  against  the  property  of 
Tories  by  certain  of  the  revolutionary  legislatures,  and  during  the  Civil 
War  Congress  passed  legislation  of  the  same  general  character.  But  the 
property  affected  by  these  measures  was  comparatively  small  in  value, 
and  it  was  natural  that  at  the  beginning  of  our  entrance  into  the  World 
War  Congress  in  creating  a  new  method  of  sequestration  should  have 
thought  it  wise  to  preserve  the  form  of  the  original  enemy  investments 
as  far  as  possible.  In  fact,  as  before  stated,  the  proceedings  show  that 
one  of  the  actuating  motives  was  to  safeguard  the  property  from  the 
waste  and  damage  to  which  it  would  be  otherwise  subject  because  of  the 
disability  of  the  former  owners  to  take  necessary  measures  for  its  pro- 
tection. Their  status  as  alien  enemies  would  debar  them  from  the  right 
to  institute  actions  in  American  courts,  and  the  stringent  prohibitions  of 
the  Act  would  effectively  prevent  communication  with  the  agents  who 
were  managing  the  property  for  them  here.  Moreover,  neither  the  extent 
nor  the  menacing  character  of  the  enemy's  American  industrial  holdings 
was  then  known.  Congress  therefore  at  this  time  saw  no  occasion  to  pro- 
vide for  the  liquidation  of  these  holdings.  For  the  time  being  it  seemed 
sufficient  to  remove  any  possibility  of  the  enemy's  receiving  the  benefit 
of  his  American  investments,  and  to  reserve  the  property  for  use  in  the 
peace  negotiations  should  it  later  appear  advisable  so  to  employ  it. 

2.  The  President  and  Custodian  given  unlimited  power  of  sale  by 
Congress.  (Amendment  March  28,  1918.) 

At  the  time  of  the  passage  of  the  original  Act  there  was  but  a  vague 
idea  of  the  extent  of  enemy  holdings  in  this  country.  The  suggestion 


was  made  to  the  committee  that  an  office  force  of  not  over  thirty-five, 
including  clerical  help,  would  suffice  to  handle  the  entire  operation  of  the 
Custodian's  office,  and  the  Custodian,  upon  his  appointment,  planned  his 
organization  to  handle  a  maximum  of  15,000  reports  of  such  enemy 
property.  How  far  apart  estimate  and  fact  proved  to  be  is  shown  by  the 
filing  of  47,000  separate  reports  of  property  belonging  to  more  than  37,000 
individual  enemies.  The  office  force  was  enlarged  nearly  twentyfolcl  beyond 
the  expectations  of  Congress,  yet  Armistice  Day  found  new  reports  of 
enemy  holdings  arriving  with  a  daily  regularity  and  volume  but  slightly 
less  than  that  of  six  months  before.  Even  more  than  two  years  later  volun- 
tary reports  of  enemy  holdings  were  still  being  received.  The  amount  of 
enemy  property  discovered  and  taken  over  is  known.  The  amount  success- 
fully concealed,  illegally  transferred,  or  not  reported  through  ignorance  of 
the  law,  will  never  be  known.  It  is,  however,  safe  to  say  that  all,  or  nearly 
all,  of  the  holdings  inimical  to  the  economic  welfare  of  our  country  were 
sequestrated  under  the  law. 

Shortly  after  the  Act  became  operative  it  developed  that  many  of 
the  major  enemy  investments  in  this  country  were  part  of  a  far-reaching 
and  effective  plan  designed  to  control  our  basic  industries;  that,  at  the 
time  these  investments  were  made,  they  were  unfriendly  to  this  country 
and  if  permitted  to  exist  would  remain  unfriendly,  even  after  peace  was 
declared. 

It  is  unnecessary  here  to  detail  the  facts  as  they  were  found  to  exist 
in  the  metal,  textile,  wireless,  magneto,  fur  and  other  industries.  For  a 
full  account,  reference  may  be  had  to  the  report  of  A.  Mitchell  Palmer, 
Alien  Property  Custodian,  February  15,  1919,  pp.  63-155. 

The  Alien  Property  Custodian  began  the  duties  of  his  office  on  October 
22,  1917.  The  first  three  months  of  operations  were  necessarily  consumed 
in  organization  and  in  classifying  the  vast  amount  of  information  con- 
cerning enemy  properties  which  poured  into  Washington  in  response  to 
the  law.  It  was  but  a  few  weeks  after  this  when  intensive  study  by  the 
Custodian's  staff  had  revealed  the  surprising  extent  and  strength  of  Ger- 
man's holdings  in  key  industries  in  this  country  and  the  important  part 
which  she  had  assigned  to  them,  not  only  in  the  field  of  commerce,  but 
in  the  actual  conduct  of  the  war  itself. 

On  March  7,  1918  the  Custodian  laid  the  situation  before  the  Senate 
Committee  on  Appropriations,  which  then  had  under  consideration  a 
bill  for  deficiency  appropriations,  a  rider  to  which  would  afford  a  ready 
means  for  the  immediate  enactment  of  such  legislation  as  Congress  might 
deem  adequate  as  to  meet  the  emergency.  At  the  hearing  the  particular 
attention  of  the  committee  was  directed  to  the  fact  that  if  the  plan  of 
mere  conservation  of  these  enemy  holdings  in  key  industries  was  adhered 
to,  its  effect  would  be  to  pile  up  great  accumulations  of  profits  arising  out 
of  the  war,  possibly  for  the  ultimate  benefit  of  the  very  men  whose  selfish 
ambitions  in  large  measure  had  been  responsible  for  bringing  on  the 
struggle.  (See  Cong.  Rec.,  March  11,  1918,  pp.  3316  et  seq.) 

In  March,  1918  the  Great  German  offenisve  had  been  launched  and 


8 

appeared  well  on  its  way  toward  Paris  and  the  Channel  ports ;  England 
had  announced  that  she  was  "fighting  with  her  back  to  the  wall,"  and 
the  realization  had  come  to  this  country,  as  well  as  to  the  Allies,  that 
every  available  force  must  be  at  once  brought  into  play  and  exerted  to 
the  utmost  in  order  that  imminent  catastrophe  might  be  averted.  Con- 
gress could  not  have  failed  to  see  that  by  changing  the  Custodian's  powers 
as  to  the  disposition  of  property  from  those  of  a  mere  curator  to  those 
of  an  absolute  owner,  a  blow  might  be  dealt  the  enemy  which  would  shake 
to  their  very  foundations  his  industrial  fortresses  beyond  the  Rhine.  And 
seeing  this,  it  exercised  its  constitutional  war  powers  to  this  end  by  the 
passage  of  the  amendment  granting  to  the  President  and  Custodian  the 
unlimited  power  of  sale.  (March  28,  1918.) 

3.  Power  given  to  seize  and  sell  patents.  (Amendment  Nov.  4, 1918.) 
But  little  progress  had  been  made  in  the  sales  program  before  very 
serious  difficulties  were  encountered  in  disposing  of  stock  in  corporate 
enterprises  where  the  business  was  based  on  patent  rights  or  the  manu- 
facture of  a  patented  article.  In  cases  where  the  title  to  the  patent  or 
patents  was  vested  in  the  corporation,  these  difficulties  did  not  arise.  In 
many  cases,  however,  title  to  the  patents  essential  to  the  life  of  the  busi- 
ness was  vested  in  one  or  more  individual  enemies  who  had  in  many 
instances  granted  but  oral  permission  to  use  the  patents.  Title  to  these 
patents  could  not  pass  with  the  stock  and  the  stock  was  practically  worth- 
less without  the  patents.  The  situation  is  explained  by  a  statement  of 
Ramsay  Hoguet,  a  patent  attorney  of  New  York,  which  statement  was 
read  before  the  Senate  Committee  during  consideration  of  this  amend- 
ment. (Hearing  before  Subcommittee,  Senate  Committee  on  Appropria- 
tions on  H.  R.  13086,  Oct.  21,  1918,  pp.  82-84) : 

"C.  P.  Goerz  American  Optical  Co.  This  company  is  one  of  the 
German-owned  American  concerns,  the  stock  of  which  the  Custo- 
dian has  taken  over  and  is  about  to  offer  for  sale  to  an  American 
purchaser.  The  business  of  the  concern  is  manufacturing  and 
selling  lenses  and  photographic  apparatus.  It  is  one  of  the  three 
or  four  largest  concerns  in  the  United  States.  More  than  50  per 
cent  of  the  devices  and  apparatus  manufactured  and  sold  by  this 
concern  are  covered  by  United  States  letters  patent,  which  are 
not  owned  by  the  concern  itself,  but  under  which  the  concern  has 
a  right  to  manufacture  under  license.  The  right  which  this 
American  concern  has  under  these  German-owned  patents  is 
simply  the  right  to  continue  to  manufacture  and  sell  the  devices 
as  long  as  the  German  concern  allows  it  to  do  so.  .  .  ." 

"G.  Siegle  Company.  In  the  case  of  this  corporation  the 
agreement  between  the  American  and  German  companies  was 
such  that  it  raised  a  distinct  doubt  as  to  whether  the  good  will 
and  trade-marks  of  the  German  company  were  conveyed  to  the 
American  so  that  it  was  impossible  to  assure  the  purchaser  that 
he  would  be  permitted  to  carry  on  the  business  under  the  name 
it  theretofore  had  been  carried  on  under  and  to  use  the  trade- 
marks in  the  business  which  they  had  adopted  and  had  acquired 
great  value." 

"It  should  be  borne  in  mind  in  all  cases  that  the  time  allowed 


9 

for  investigation  is  so  short  that  a  purchaser  must  to  some  extent 
rely  upon  the  representations  made  to  him  by  the  Governmental 
officers  having  the  sale  in  charge,  and  that  the  average  purchaser 
believes  that  he  can  secure  no  better  title  than  that  conveyed  to 
him  by  the  Government  of  the  United  States.  It  is  at  present 
impossible  to  guarantee  to  the  prospective  purchaser  that  he  will 
be  permitted  to  conduct  the  business  he  purchases  because  of 
patent  infringement,  and  thus  the  purchaser  may  be  very  seri- 
ously misled  and  may  believe  that  he  is  buying  a  going  business 
when  in  fact  he  is  purchasing  merely  the  buildings  and  machin- 
ery (very  often  of  no  use  whatever  except  for  the  practice  of 
certain  patented  processes  and  for  the  manufacture  of  certain 
patented  articles)  without  any  opportunity  of  using  the  physical 
assets  of  the  concern  for  the  purpose  for  which  they  were  intended 
without  laying  himself  open  to  a  charge  of  infringement.  .  .  ." 
"Atlantic  Communication  Co.  In  the  case  of  the  Atlantic 
Communication  Co.,  it  is  proposed  to  transfer  to  the  Navy  Depart- 
ment the  wireless  plant  located  at  Sayville,  Long  Island,  and  all 
of  the  patent  rights  under  which  this  station  is  operated.  The 
American  corporation  which  operated  the  station  holds  merely  a 
license  to  operate  under  Letters  Patent  owned  by  a  German  com- 
pany, and  a  sale  of  the  license  to  the  Navy  Department  would,  of 
course,  place  the  Department  under  the  obligation  of  paying 
royalties,  accounting,  etc.,  to  the  German  company.  While  these 
royalties,  in  the  case  of  mere  operation  of  the  plant,  are  not 
excessive,  a  sale  of  any  apparatus,  under  the  patents  carries  a 
20  per  cent  royalty  under  the  license.  Inasmuch  as  the  Navy 
Department  is  now  equipping  all  of  the  ships  being  built  by  the 
Emergency  Fleet  Corporation  with  wireless  apparatus,  it  will  be 
impossible  to  sell  the  wireless  apparatus  located  on  these  ships  to 
the  ultimate  purchasers  of  the  ships  without  paying  a  license  fee 
to  the  German  patent  owners  and  without  accounting  for  each 
installation  placed  in  use  upon  a  United  States  ship.  There  are 
also  a  considerable  number  of  patents  the  titles  to  which  are  in 
the  names  of  individual  German  owners,  which  the  Navy  Depart- 
ment desires  to  acquire  in  order  to  be  free  to  operate  its  large 
number  of  stations  (both  ship  and  shore)  without  interference 
by  way  of  patent  litigation.  As  the  Act  stands  at  present  the 
Navy  Department  can  not  operate  under  these  patents  except  by 
securing  a  license  from  the  German  owners  and  subjecting  itself 
to  patent  suits  after  the  war  and  to  the  payment  of  a  royalty 
in  accordance  with  the  provisions  of  section  10  and  accounting 
for  every  installation  made  and  subjecting  itself  to  terms  which 
the  Navy  Department  could  not  comply  with,  such  as  inspection, 
etc." 

Further,  Mr.  Lee  Bradley,  chief  counsel  for  the  Custodian,  appeared 
before  the  committee  and  said,  in  part  (pp.  81,  84) : 

".  .  .  In  the  urgent  deficiency  bill  approved  March  28 — 
the  last  page  of  the  printed  copy  contains  it — Congress  conferred 
the  unrestricted  power  of  sale  on  the  Alien  Property  Custodian, 
striking  out  all  limitations  about  cases  only  of  waste  and  the  like. 
Following  that  amendment,  the  Alien  Property  Custodian,  with 
the  approval  of  the  President,  formulated  the  policy  of  selling 
the  enemy  interest  in  all  enemy  going  businesses  in  this  country. 
That  was  done  because  they  were  found  invariably  to  be  nests  of 


10 

espionage,  and  outposts  of  their  propaganda  and  sabotage  and 
general  deviltry,  and  of  course  they  constitute  a  very  powerful 
strangle  hold  on  the  industry  and  commerce  of  the  country.  But 
experience  has  demonstrated  that  the  power  of  sale  thus  con- 
ferred, although  unlimited  in  its  terms,  is  ineffective,  for  two 
reasons  in  particular:" 

"First,  the  prevailing  legal  opinion .  is  that  patents  are  not 
included  within  the  enemy  property  which  is  subject  to  seizure 
and  sale  by  the  Alien  Property  Custodian.  That  opinion  prevails 
because  of  the  specific  treatment  given  to  patents,  copyrights, 
trade-marks,  and  other  similar  species  of  property  by  Section  10 
of  the  Act.  The  only  power  in  reference  to  these  species  of  prop- 
erty is  the  power  conferred  upon  the  President  to  license  their 
use  within  certain  limits  that  are  defined,  and  those  licenses  may 
either  be  for  a  fixed  term  or  for  the  life  of  the  patent,  as  the 
Federal  Trade  Commission — to  which  the  President  has  dele- 
gated the  power  of  Section  10 — may  decide.  But  any  license  so 
granted  is  subject  to  judicial  review  after  the  end  of  the  war 
as  to  the  license  fees  paid  thereunder;  and  it  goes  even  to  the 
extent  of  authorizing  the  court,  if  it  thinks  proper  so  to  do,  to 
cancel  the  license  in  its  entirety." 

"We  find  in  these  concerns  that  the  patented  process  is 
important,  and  indeed  indispensable  in  the  great  majority  of 
cases.  We  find,  furthermore,  even  in  the  case  of  an  American 
corporation  where  the  enemy  owns  the  stock,  that  the  patent 
itself  is  rarely  owned  by  the  corporation,  but  that  the  corporation 
exercises  a  mere  license,  the  title  to  the  patent  itself  standing 
in  the  name  of  the  enemy,  some  individual  stockholder  and  prob- 
ably a  predominating  stockholder,  and  the  corporation  exercising 
the  patented  process  under  a  license  which  in  many  instances  is 
revocable  at  will.  That  seems  to  be  a  favorite  German  method. 

"This  general  subject  has  been  considered  at  some  length 
by  the  Department  of  Justice — the  legal  features  of  it,  of  course 
— and  also  quite  extensively  with  the  general  counsel  of  the 
Federal  Trade  Commission,  Mr.  Walsh,  and  Mr.  Walsh  has  stated 
very  broadly  that  he  feels — and  I  assume  he  voices  the  views  of 
the  Commission — that  this  Act  should  be  amended  so  as  to  confer 
the  power  upon  the  Alien  Property  Custodian,  or  upon  the  Presi- 
dent, to  seize  patents,  copyrights,  trade-marks,  and  other  similar 
pieces  of  property,  and  deal  with  them  as  provided  by  the  terms 
of  the  Act  in  respect  of  all  other  enemy  property." 

The  doubt  as  to  the  power  of  the  Custodian  to  seize  and  sell  patents 
was  thus  first  raised  by  attorneys  representing  prospective  purchasers  of 
stock  in  enterprises  founded  upon  the  use  of  patents  not  owned  by  the 
corporation.  This  question  arose  by  reason  of  the  provisions  of  Section  10 
of  the  Act,  which,  among  other  things,  provided  for  the  licensing  of  Amer- 
ican citizens  in  the  use  of  enemy-owned  patents  as  therein  provided. 

The  phraseology  of  Section  10  may  have  been  sufficient  basis  for  the 
belief  that  Congress  intended  originally  to  except  enemy-owned  patents 
from  sequestration.  It  is  not,  however,  ground  for  belief  or  argument  that 
Congress,  in  making  this  apparent  exception  did  so  because  the  enemy 
owners  thereof  possessed  rights  any  more  sacred  than  the  owners  of 


11 

other  classes  of  property.  On  the  contrary,  the  Congress  plainly  recog- 
nized the  necessity  of  saving  to  this  country,  its  army,  navy  and  manufac- 
turers the  general  use  of  these  patents,  not  only  during  the  war,  but,  if 
need  be,  throughout  the  life  of  the  patent.  The  licensing  procedure  pro- 
vided in  this  section  was  doubtless  at  the  time  of  the  passage  of  the  Act 
deemed  to  be  an  expedient  method  of  insuring  this  general  and  necessary 
use. 

Congress,  therefore,  realizing  the  necessity  of  extending  the  Custo- 
dian's power  of  seizure  to  patents,  copyrights  and  trade-marks,  in  order 
to  give  full  effect  to  the  power  of  sale  already  granted,  amended  Section 
7  (c)  of  the  Act  (Nov.  4,  1918)  in  such  a  manner  as  to  effect  this  purpose. 


PART  II. 

LAWS    AND    EXECUTIVE    ORDERS    UNDER    WHICH    THE    ALIEN 

PROPERTY  CUSTODIAN  SEIZED  ENEMY  PATENTS  AND  SOLD 

CERTAIN  OF  SAME  TO  THE  CHEMICAL  FOUNDATION,  INC. 

1.     LAWS  (TRADING  WITH  THE  ENEMY  ACT). 

The  Alien  Property  Custodian  (appointed  under  Section  6  of  the  law) 
sold  the  patents,  copyrights  and  trade-marks  now  owned  by  the  Founda- 
tion to  it  under  the  provisions  of  the  Trading  with  the  Enemy  Act,  as 
amended. 

It  will  prove  of  interest  to  make  a  review  of  the  most  important  fea- 
tures of  the  operation  of  the  officers  of  the  Government  under  this  law. 

(a)     POWER  OF  SALE  UNDER  THE  ORIGINAL  ACT 
AND  AS  AMENDED. 

Under  Section  12  of  the  law,  when  first  enacted,  the  disposition  and 
sale  of  enemy  property  was  permissible  only  in  case  such  action  was  neces- 
sary to  prevent  waste  and  protect  the  property,  and  to  the  end  that  the 
interests  of  the  United  States  in  such  property,  or  those  of  such  persons 
as  might  ultimately  become  entitled  thereto,  or  the  proceeds  thereof,  might 
be  preserved  and  safeguarded.  This  provision  for  sale  was  radically 
changed  by  the  amendment  on  March  28, 1918.  All  of  the  language  limiting 
the  Custodian  in  his  power  of  sale  to  such  cases  as  involved  waste  and  the 
like  was  struck  out,  and  Congress  in  direct  verbiage  conferred  upon  the 
Custodian  the  unrestricted  power  to  make  any  disposition,  of  the  properties 
he  held,  by  sale  or  otherwise,  in  like  manner  as  though  he  were  the  absolute 
owner.  This  power  was  subject  to  the  supervision  and  direction  of  the 
President  of  the  United  States.  Further,  the  amendment  provided  that 
any  property  so  sold,  except  when  sold  to  the  United  States,  should  be 
sold  only  to  American  citizens,  at  public  sale  to  the  highest  bidder,  after 
public  advertisement  of  time  and  place  of  sale,  which  should  be  where 
the  property  or  a  major  portion  of  it  was  situated,  unless  the  President 
stating  the  reasons  therefor  in  the  public  interest  should  otherwise 
determine. 


12 

(b)     PROPERTY  SUBJECT  TO  SALE  UNDER  ORIGINAL  ACT, 
AND  AS  AMENDED. 

All  property  which  the  Custodian  held  was  subject  to  disposition 
under  this  amendment.  By  virtue  of  Section  7  (c)  of  the  Act  as  originally 
enacted,  the  President  was  authorized  to  require  that  any  money  or  other 
property  owing  or  belonging  or  held  for  the  benefit  of  an  enemy  or  ally 
of  enemy  as  defined  in  the  Act,  not  holding  a  license  granted  by  the  Presi- 
dent, which  he  determined  was  so  owing  or  so  belonging  or  so  held,  should 
be  conveyed  and  delivered  over  to  the  Alien  Property  Custodian;  and  all 
such  property  was  to  be  held  and  administered  by  him  as  provided  in  Sec- 
tion 12. 

It  was  considered  that  the  unlimited  power  of  sale  was  ineffective  as 
the  law  was  not  broad  enough  in  scope  to  authorize  the  President  to  require 
the  delivery  and  conveyance  of  enemy-owned  patents,  copyrights  and 
trade-marks,  so  thereafter  Congress  passed  an  amendment  to  this  section 
of  the  law  (Section  7  (c)  ),  approved  November  4,  1918,  which  in  express 
words  authorized  the  President  to  require  the  conveyance  and  delivery 
of  patents,  copyrights  and  trade-marks  which  he  determined  were  so 
owned  or  held  to  the  Custodian ;  and  the  latter  official  was  also  empowered 
to  seize  the  same;  and  similarly  all  such  patents,  copyrights  and  trade- 
marks were  to  be  held  and  administered  under  the  same  powers.  (Sec- 
tion 12.) 

Enemies  and  allies  of  enemies  whose  property  was  thus  subjected  to 
a  possible  seizure  and  sale  by  the  Alien  Property  Custodian  at  no  time 
have  included  German  and  Austro-Hungarian  citizens  who  were  peaceably 
residing  in  the  United  States.  In  fact,  the  Custodian  was  never  authorized 
to  seize  any  property  belonging  to  enemy  citizens  living  in  this  country, 
with  the  exception  of  those  who  had  been  interned  by  the  War  Department. 
Although  the  persons  included  within  the  terms  "enemy"  and  "ally  of 
enemy"  were  defined  by  Congress  to  include  a  number  of  classes,  by  far 
the  greater  portion  of  those  affected  were  German  and  Austro-Hungarian 
citizens  or  subjects  residing  within  the  territorial  limits  of  their  own 
countries. 

By  virtue  of  this  authority  of  seizure,  including  the  power  delegated 
to  him  by  the  President  (Executive  Orders  dated  October  12,  1917,  Febru- 
ary 26,  1918,  and  December  3,  1918)  the  Alien  Property  Custodian  was 
vested  with  the  entire  executive  administration  of  the  provisions  of  Section 
7  (c)  both  prior  and  subsequent  to  its  amendment. 

The  seizure  by  the  Custodian  of  patents,  copyrights  and  trade-marks 
and  the  recordation  of  the  instrument  of  seizure  operated  as  a  conveyance 
to  him  of  the  property  so  seized  and  gave  him  full  possession  and  owner- 
ship. The  Act  in  this  regard  provides  (Section  7  (c)  )  that  any  such 
requirement  might  be  recorded  in  the  Patent  or  Copyright  office,  as  the 
case  might  be,  and  that  if  so  recorded  should  impart  the  same  notice  and 
have  the  same  force  and  effect  as  a  duly  executed  and  recorded  assignment. 


13 

2.     EXECUTIVE  ORDERS,     (a)     PRESIDENT'S  POWER  OF  SUPER- 
VISING SALES  DELEGATED  TO  FRANK  L.  POLK. 

The  President's  power  to  supervise  and  direct  the  disposition  of 
property  by  the  Custodian,  and  to  waive  the  requirement  for  public  sale 
where  the  public  interest  demanded  it,  was  delegated  by  him  under  author- 
ity of  Section  5  (a)  to  Mr.  Frank  L.  Polk,  through  an  executive  order 
issued  December  3,  1918.  Mr.  Polk  was  the  then  Acting  Secretary  of 
State,  although  the  delegation  was  made  to  him  as  an  individual.  Presum- 
ably the  reason  for  the  issuance  of  the  order  was  the  President's  contem- 
plated absence  from  the  country. 

(b)     SALES  TO  FOUNDATION  AUTHORIZED  BY  MR.  POLK. 

Mr.  Frank  L.  Polk  thereafter  issued  certain  orders,  by  virtue  of  this 
power  and  authority  authorizing  the  Custodian  to  make  the  sales  of  pat- 
ents, copyrights  and  trade-marks  to  The  Chemical  Foundation,  Inc. 

The  first  of  these  orders  was  issued  on  February  26,  1919.  This  order 
recites  that  by  virtue  of  the  authority  of  the  President  vested  in  him  by 
the  provisions  of  the  Act  and  the  amendments  made  to  Sections  12  and 
7  (c)  thereof  on  March  28, 1918,  and  November  4,  1918,  respectively,  which 
authority  has  been  delegated  to  him  (Frank  L.  Polk)  by  Executive  Order 
of  December  3,  1918,  (above  mentioned) ,  he  thereby  in  the  public  interest 
determined  and  ordered : 

1.  That  the   Custodian  might  release   and  discharge  the 
United  States  of  America  and  any  department  thereof  upon  such 
terms  and  conditions  as  to  the  Custodian  seemed  proper,  from 
any  and  all  claims  and  demands  arising  from  any  alleged  infringe- 
ment of  the  letters  patent  and  trade-marks  and  rights  thereunder 
thereafter  referred  to. 

2.  That  the  Custodian  might  sell  at  private  sale,  without 
public  or  other  advertisement,  to  The  Foundation  at  such  place 
and  upon  such  terms  and  conditions  as  to  the  Custodian,  or  his 
authorized  agent,  might  seem  proper,  all  of  the  letters  patent  and 
trade-marks  and  rights  thereunder,  including  all  damages  at  law 
and  in  equity  for  the  past  infringement  thereof,  which  the  Custo- 
dian had  seized  or  might  seize  under  the  Act,  and  which  he  (the 
Custodian)  should  from  time  to  time  determine  to  relate  to  the 
objects  and  purposes  of  The  Foundation  as  expressed  and  defined 
by  its  charter. 

The  order  then  recites  the  reasons  in  the  public  interest  for  the  fore- 
going determinations. 

1.  That  the  letters  patent,  trade-marks  and  similar  rights 
could  not  be  sold  to  the  best  advantage  at  public  sale  after  public 
or  other  advertisement. 

2.  That   The   Foundation   had   been   incorporated   for  the 
purpose  of  holding  letters  patent,  trade-marks  and  similar  rights 
relating  to  the  chemical  and  allied  sciences  as  trustee  for  Ameri- 
can industry,  for  the  purpose  of  the  Americanization  of  such 
industries  as  may  be  affected  thereby,  of  eliminating  alien  inter- 
ests hostile  to  said  American  industries  and  of  the  advancement 
of  chemical  and  allied  industries  in  the  United  States.    That  The 


14 

Foundation  was  obligated  to  grant  non-exclusive  licenses  upon 
equal  terms  at  a  uniform  royalty  to  qualified  American  manu- 
facturers and  is  empowered  to  grant  free  licenses  to  the  United 
States  for  any  use  the  United  States  might  desire  to  make  of 
the  inventions  covered  by  the  letters  patent  and  similar  rights. 

3.  That  the  public  interest  would  be  best  served  by  a  wide 
use  of  the  inventions  covered  by  the  letters  patent  and  similar 
rights  and  that  such  wide  use  could  be  most  readily  promoted  by 
the  licenses  which  The  Foundation  by  its  charter  was  obligated 
to  grant. 

4.  That  a  private  sale  would  prevent  the  said  letters  patent, 
trade-marks  and  similar  rights  from  falling  into  the  hands  of 
purchasers  who  would  be  unwilling  or  unable  to  put  the  inventions 
covered  thereby  into  use  or  would  use  them  for  purely  specula- 
tive purposes. 

5.  That  it  would  be  impossible  to  make  a  public  sale  of 
the  said  letters  patent,  trade-marks  and  similar  rights  so  as  to 
secure  the  foregoing  benefits  to  the  public. 

6.  That  unnecessary  expense,  delay  and  inconvenience  may 
be  avoided  by  private  sale. 

Subsequent  to  the  issuance  of  the  foregoing  order  Mr.  Polk  issued 
an  order  on  April  5,  1919,  authorizing  the  sale  to  The  Foundation  of  copy- 
rights, certificates  of  registration  thereof,  publications  upon  which  such 
registrations  were  granted,  applications  for  letters  patent  and  for  the 
registration  of  trade-marks  and  copyrights  and  all  rights  thereunder. 
This  order  contains  substantially  the  same  recitations  and  determinations 
as  the  order  of  February  26,  1918,  and  was  issued  for  the  purpose  of 
extending  the  provisions  of  that  instrument.  This  is  clear  after  noting 
the  first  determination  and  order  made  then,  which  provides: 

"A  similar  order,  rule  and  regulation  relating  to  letters  pat- 
ent, trade-marks  and  similar  rights  has  been  made  by  me  the 
twenty-sixth  day  of  February,  1919,  and  this  order  is  supple- 
mental thereto  and  necessary  to  fully  carry  out  the  objects  and 
purposes  of  said  order  of  February  26,  1919." 

(c)     CUSTODIAN  MAKES  SALES. 

The  Alien  Property  Custodian  pursuant  to  these  orders  and  to  the 
authority  vested  in  him  by  the  Act  thereafter  consummated  the  sale  of 
divers  letters  patent,  copyrights  and  trade-marks,  together  with  all  rights 
and  benefits  appurtenant  to  the  ownership  thereof,  including  all  claims 
and  demands  for  the  past  infringement  thereof,  to  The  Foundation. 

This  sale  did  not  include,  and  properly  so,  any  conveyance  of  claims 
and  demands  against  the  Government  of  the  United  States  for  any  past 
infringement  by  it  of  the  various  items  so  sold. 

The  first  and  major  assignment  of  the  Custodian  to  The  Foundation 
was  executed  on  April  10,  1919,  and  this  conveyance  expressly  excluded 
any  claim  or  demand  for  infringement  as  against  the  United  States  Gov- 
ernment. 

The  assignment  was  subject  further  to  the  rights  of  citizens  of  the 
United  States  or  of  friendly  nations  as  had  been  set  forth  in  the  seizure 
orders. 


15 

From  time  to  time  thereafter  the  Custodian  executed  further  assign- 
ments, many  of  which  were  corrective  in  character,  although  additional 
items  were  also  conveyed.  These  assignments  (which  are  not  annexed 
as  exhibits)  contain  substantially  the  same  provisions  of  the  assignment 
of  April  10,  1919,  which  may  be  found  hereto  attached. 

(d)     CONFIRMATORY  ACTION  BY  PRESIDENT  AND  CUSTODIAN. 

Following  the  return  of  the  President  from  abroad,  an  Executive  Order 
was  issued  by  him  on  February  13,  1920,  which  was  confirmatory  in  char- 
acter. In  this  order,  after  reciting  the  power  vested  in  him,  the  authoriza- 
tion of  the  Alien  Property  Custodian  to  sell  to  The  Foundation,  by  virtue 
of  Mr.  Folk's  orders,  certain  choses  in  action,  and  rights,  interests  and 
benefits;  the  intention  of  such  orders  to  so  authorize  the  sale  of  all  such 
choses  in  action,  rights,  interests,  benefits  under  agreements,  rights  and 
claims  of  any  character  and  description  including  rights  to  receive  moneys 
by  way  of  royalties  or  otherwise  as  compensation  for  the  use  of  patents, 
copyrights  and  trade-marks  as  the  Custodian  may  have  seized,  and  the 
doubt  that  had  arisen  as  to  the  Custodian's  authority  to  make  such  a  sale, 
the  President  in  the  public  interest  determined  and  ordered:  That  the 
Custodian  was  authorized  (a)  to  make  such  sale  to  The  Foundation  in 
the  manner  therein  provided,  and  (b)  in  case  of  sales  theretofore  made 
of  property  which  he  was  thereby  authorized  to  sell,  but  as  to  which  his 
prior  authority  under  Mr.  Polk's  orders  was  deemed  doubtful,  to  confirm 
and  ratify  the  same  by  suitable  instrument  of  confirmation. 
The  order  is  concluded  by  the  following: 

"My  reasons  for  the  foregoing  determination  and  order  are 
stated  in  the  said  orders  of  Frank  L.  Polk  of  the  26th  of  February, 
1919,  and  the  5th  of  April,  1919 ;  and  in  addition  thereto,  the  pub- 
lic interest  will  be  best  served  by  the  elimination  of  any  enemy 
interest  adverse  to  American  citizens  arising  by  reason  of  said 
choses  in  action,  or  rights,  interests  and  benefits  under  agree- 
ments and  by  the  devoting  of  any  payments  made  by  reason  of 
said  choses  in  action  or  under  said  agreements  by  The  Chemical 
Foundation,  Inc.,  to  the  promotion  of  the  objects  stated  in  its 
charter." 

And  in  pursuance  of  this  order,  the  Alien  Property  Custodian  con- 
firmed and  ratified  to  The  Foundation,  by  instrument  dated  March  1,  1921, 
all  sales  theretofore  made  to  it  by  him. 

3.     DECISIONS  OF  UNITED  STATES  SUPREME  COURT 
ON  TRADING  WITH  THE  ENEMY  ACT. 

This  concludes  the  comment  on  the  laws  and  orders  under  which  the 
sales  were  made  to  The  Foundation.  It  may  prove  of  general  interest, 
however,  to  add  a  reference  to  the  cases  (two  in  number)  involving  the 
construction  of  the  Trading  with  the  Enemy  Act  and  the  exercise  of 
powers  thereunder  which  have,  up  to  this  time,  been  decided  by  the 
Supreme  Court  of  the  United  States.  Many  other  such  cases,  of  course, 
have  been  determined  by  various  lower  courts  and  might  be  discussed  did 
space  permit,  but  these  two  cases  will  be  found  of  peculiar  interest,  not 


16 

only  as  an  expression  of  opinion  from  our  highest  court,  but  also  because 
they  interpret  some  portions  of  the  Act  dealt  with  above. 

In  Central  Union  Trust  Company  vs.  Garvan  (January  24,  1921),  254 
U.  S.  554,  65  L.  Ed.       ,  the  court  said: 

As  to  the  constitutionality  of  the  Act: 

There  can  be  no  doubt  that  Congress  has 

power  to  provide  for  an  immediate  seizure  in  war  times  of  prop- 
erty supposed  to  belong  to  the  enemy,  as  it  could  provide  for  an 
attachment  or  distraint,  if  adequate  provision  is  made  for  a  return 
in  case  of  mistake. 

As  to  delegation  of  Presidential  authority: 

The  first  question  then  is  whether  the  Cus- 
todian had  the  right  to  make  the  demand.  By  Sec.  5  the  Presi- 
dent may  exercise  any  power  or  authority  conferred  by  the  Act 
through  such  officers  as  he  may  direct.  It  is  admitted  that  he 
has  exercised  the  powers  material  to  these  cases  through  the 
Enemy  Property  Custodian  and  by  the  Act  of  November  4,  1918, 
c.  201,  40  Stat.  1020,  the  Custodian  is.  given  the  right  to  seize. 
By  Sec.  7  (c),  as  originally  enacted,  'If  the  President  shall  so 
require,  any  money  or  other  property  owing  or  belonging  to  or 
held  for,  by,  on  account  of,  or  on  behalf  of,  or  for  the  benefit 
of  any  enemy  or  ally  of  an  enemy  not  holding  a  license  granted 
by  the  President  hereunder,  which  the  President  after  investi- 
gation shall  determine  is  so  owing  or  so  belongs,  or  is  so  held, 
shall  be  conveyed,  transferred,  assigned,  delivered  or  paid  over 
to  the  Alien  Property  Custodian.'  We  are  to  take  it  therefore  that 
the  President  has  'so  required,'  and  that  a  case  is  made  out  under 
Sec.  17  unless  we  are  to  consider  the  defences  interposed." 

As  to  effect  of  Custodian's  demand  and  his  power  of  sale : 

"*  *  *  If  we  look  no  further  than  Section  7  (c),  it 
is  plain  that  obedience  to  the  statute  requires  an  immediate  trans- 
fer in  any  case  within  its  terms  without  awaiting  a  resort  to  the 
Courts.  The  occasion  of  the  duty  is  a  demand  after  a  deter- 
mination by  the  President  and  it  is  hard  to  give  much  meaning 
to  the  words  'which  the  President  after  investigation  shall  deter- 
mine is  so  .  .  .  held,'  unless  the  determination  and  demand 
call  the  duty  into  being.  The  condition  'after  investigation'  addi- 
tionally points  to  the  intent  to  make  his  act  decisive  upon  the 
point,  as  it  is  in  other  cases  mentioned  in  Sec.  7  (a)." 

"To  the  conclusion  that  we  reach  it  is  objected  that  the 
Custodian  gets  a  good  deal  more  than  bare  possession — that  the 
property  is  to  be  conveyed  to  him,  and  that  by  the  Act  of  March 
28,  1918,  c.  28,  40  Stat.  459,  460,  enlarging  Sec.  12,  the  Custodian 
'shall  be  vested  with  all  of  the  powers  of  a  commonlaw  trustee 
in  respect  of  all  property,  other  than  money,  which  has  been  or 
shall  be,  or  which  has  been  or  shall  be  required  to  be,  conveyed,' 
etc.,  to  him,  and  is  given  the  power  to  sell  and  manage  the  same 
as  though  he  were  absolute  owner.  All  this  may  be  conceded  if 
no  claim  is  filed.  But  this  act  did  not  repeal  Sec.  9,  which  is 
amended  by  the  later  Acts  of  July  11,  1919,  c.  6,  41  Stat.  35,  and 
of  June  5,  1920,  c.  241,  41  Stat.  977,  and  as  we  have  said,  pro- 
vides for  immediate  claim  and  suit  and  requires  the  property  in 
cases  of  suit  to  be  retained  in  the  custody  of  the  Alien  Property 
Custodian  or  in  the  Treasury  of  the  United  States  to  abide  the 


17 

result.  The  present  proceeding  gives  nothing  but  the  preliminary 
custody  such  as  would  have  been  gained  by  seizure.  It  attaches 
the  property  to  make  sure  that  it  is  forthcoming  if  finally  con- 
demned and  does  no  more." 

In  Stoehr  vs.  Garvan  (February  28,  1921),  255  U.  S.  239,  65  L.  Ed., 
the  court  said: 

As  to  constitutionality  of  the  Act: 

"*  *  *  The  Trading  with  the  Enemy  Act,  whether 
taken  as  originally  enacted,  October  6,  1917,  c.  106,  40  Stat.  411, 
or  as  since  amended,  March  28,  1918,  c.  28,  40  Stat.  459,  460; 
November  4, 1918,  c.  201,  40  Stat.  1020;  July  11,  1919,  c.  6,  41  Stat. 
35 ;  June  5,  1920,  c.  241,  41  Stat.  977,  is  strictly  a  war  measure  and 
finds  its  sanction  in  the  constitutional  provision,  Art.  1,  Sec.  8,  Cl. 
11,  empowering  Congress  'to  declare  war,  grant  letters  of  marque 
and  reprisal,  and  make  rules  concerning  captures  on  land  and 
water.' 

Brown  vs.  United  States,  8  Cranch  110,  126 ; 

Miller  vs.  United  States,  11  Wall.  268,  305." 

"*  That  Congress  in  time  of  war  may  authorize 

and  provide  for  the  seizure  and  sequestration  through  executive 
channels  of  property  believed  to  be  enemy-owned,  if  adequate  pro- 
vision be  made  for  a  return  in  case  of  mistake,  is  not  debatable. 
Central  Union  Trust  Co.  v.  Garvan,  supra.  There  is  no  warrant 
for  saying  that  the  enemy  ownership  must  be  determined  judi- 
cially before  the  property  can  be  seized;  and  the  practice  has 
been  the  other  way.  The  present  act  commits  the  determination 
of  that  question  to  the  President,  or  the  representative  through 
whom  he  acts,  but  it  does  not  make  his  action  final.  On  the 
contrary,  it  distinctly  reserves  to  any  claimant  who  is  neither 
an  enemy  nor  an  ally  of  an  enemy  a  right  to  assert  and  establish 
his  claim  by  a  suit  in  equity  unembarrassed  by  the  precedent 
executive  determination.  Not  only  so,  but  pending  the  suit,  which 
the  claimant  may  bring  as  promptly  after  the  seizure  as  he  chooses, 
the  property  is  to  be  retained  by  the  Custodian  to  abide  the  result, 
and,  if  the  claimant  prevails,  is  to  be  forthwith  returned  to  him. 
Thus  there  is  provision  for  the  return  of  property  mistakenly 
sequestered;  and  we  have  no  hesitation  in  pronouncing  it  ade- 
quate, for  it  enables  the  claimant,  as  of  right,  to  obtain  a  full 
hearing  on  his  claim  in  a  court  having  power  to  enforce  it  if 
found  meritorious. 

As  to  delegation  of  Presidential  authority : 

"*  *  *  The  President,  by  orders  of  October  12, 
1917,  and  February  26,  1918,  committed  to  the  Alien  Property 
Custodian  the  executive  administration  of  Sec.  7  (c) ,  including  the 
power  to  determine  after  investigation  whether  property  was 
.enemy-owned,  etc.,  and  to  require  the  surrender  or  seizure  of 
such  as  he  should  determine  was  so  owned. 

One  objection  urged  by  the  plaintiff  is  that 

the  seizure  permitted  by  the  Act  is  confined  to  money  or  property 
'which  the  President  after  investigation  shall  determine'  is 
enemy-owned,  etc.,  and  that  here  there  was  no  such  deter- 
mination by  the  President,  but  only  by  the  Custodian.  Whether 
the  objection  would  be  good  if  it  turned  entirely  on  the  words 


18 

of  Sec.  7  (c),  on  which  the  plaintiff  relies,  we  need  not  consider; 
for  they  obviously  are  qualified  and  explained  by  Sec.  5,  which 
very  plainly  enables  the  President  to  exercise  his  power  under 
Sec.  7  (c)  'through  such  officer  or  officers  as  he  may  direct.'  By 
the  orders  already  noticed  the  President  directed  that  this  power 
be  exercised  through  the  Alien  Property  Custodian.  It  therefore 
is  as  if  the  words  relied  on  had  been  'which  the  President  acting 
through  the  Alien  Property  Custodian,  shall  determine  after  in- 
vestigation' is  enemy-owned,  etc.  In  short,  a  personal  determi- 
nation by  the  President  is  not  required ;  he  may  act  through  the 
Custodian,  and  a  determination  by  the  latter  is  in  effect  the  act 

of  the  President.     Central  Union  Trust  Co.  v.  Garvan,  ante. ; 

The  Confiscation  Cases,  20  Wall.  92,  109. 

As  to  the  Treaty  with  Prussia  proclaimed  March  14,  1829  (2  Malloy's 
Treaties,  etc.,  between  United  States  and  other  powers,  p.  1496) : 

"*  *         The  treaty  provisions  relied  on  (Articles  23 

and  24,  8  Stat.  174)  relate  only  to  the  rights  of  merchants  of 
either  country  'residing  in  the  other'  when  war  arises,  and  there- 
fore are  without  present  application. 


PART  III. 

RIGHTS  OF  ENEMY  NATIONALS  AS  TO  PROPERTY  SEQUESTRATED 

BY  ALIEN  PROPERTY  CUSTODIAN. 

1.  RIGHTS  UNDER  THE  ACT. 

That  during  war  Congress  enjoys  the  power  to  confiscate  enemy  prop- 
erty, has  since  the  case  of  Brown  v.  United  States  (1814)  8  Cranch  110, 
not  been  open  to  argument.  In  that  case  Chief  Justice  Marshall  said 
in  part : 

That  war  gives  to  the  sovereign  full  right 

to  take  the  persons  and  confiscate  the  property  of  the  enemy, 
wherever  found,  is  conceded.  The  mitigations  of  this  rigid  rule, 
which  the  humane  and  wise  policy  of  modern  times  has  intro- 
duced into  practice,  will  more  or  less  affect  the  exercise  of  this 
right,  but  can  not  impair  the  right  itself.  That  right  remains 
undiminished,  and  when  the  sovereign  authorities  shall  choose  to 
bring  it  into  operation,  the  judicial  department  must  give  effect 
to  its  will. 

The  Trading  with  the  Enemy  Act,  although  not  enacted  as  an  act 
of  confiscation,  nevertheless  reserves  to  Congress  the  full  and  complete 
authority  to  dispose  of  the  properties  held  by  the  Custodian  as  it  may 
choose,  Section  12  providing  that 

"After  the  end  of  the  war  any  claim  of  an  enemy  or  of  an 
ally  of  enemy  to  any  money  or  other  property  received  and  held 
by  the  Alien  Property  Custodian  or  deposited  in  the  United 
States  Treasury  shall  be  settled  as  Congress  shall  direct." 

An  examination  of  the  committee  hearings  and  debates  on  the  bill 
will  shov  that  Congress  appreciated  that  there  would  be  many  matters 
to  be  adjusted  between  the  belligerent  countries  when  the  war  was  over, 


19 

and  deemed  it  advisable  that  all  such  property  should  be  withheld  from 
the  former  owners  pending,  and  as  a  force,  in  the  conclusion  of  the  re- 
spective claims  that  might  be  asserted.  (65th  Congress,  1st  Session,  H.  R. 
4960). 

It  is  thus  seen  that  by  the  Act  the  former  enemy  owners  are  estopped 
to  bring  any  character  of  action  with  regard  to  the  recovery  of  their 
properties,  or  the  proceeds  of  the  sale  of  such  properties  until  Congress 
has  legislated  on  the  subject.  The  only  exceptions  to  the  foregoing  were 
specifically  provided  by  Congress.  By  various  amendments  to  Section  9 
of  the  Act,  which  is  the  relief  section  (Acts  of  July  11,  1919;  June  5, 
1920;  February  27,  1921)  Congress  permitted,  among  others  (of  no  im- 
portance in  this  discussion)  certain  of  the  aforementioned  German  and 
Austro-Hungarian  subjects  who,  under  the  treaties  of  peace  designated 
therein  (Amendment  of  June  5,  1920),  had  acquired  citizenship  in  newly 
created  states  or  allied  nations,  chiefly  by  reason  of  the  changes  made  in 
sovereignty  over  territories  which  prior  to  the  war  formed  a  part  of  Ger- 
many and  Austria-Hungary,  to  recover  from  the  Custodian  any  property 
he  held  belonging  to  them  in  kind,  or  if  it  had  been  sold,  the  proceeds  of 
such  sale. 

In  case  of  sale,  such  claimants  are  limited  strictly  to  the  proceeds  of 
sale;  Section  7  (c)  as  amended  specifically  providing  that  the  sole  relief 
and  remedy  of  any  persons  having  a  claim  to  properties  held  by  the  Cus- 
todian shall  be 

"that  provided  by  the  terms  of  this  Act  and  in  the  event  of  sale 
or  other  disposition  of  such  property  by  the  Alien  Property  Cus- 
todian shall  be  limited  to  and  enforced  against  the  net  proceeds 
received  therefrom. 

2.     RIGHTS  UNDER  THE  TREATIES  OF  PEACE. 

This  reservation  by  Congress  as  to  what  claims,  if  any,  shall  be  here- 
after allowed  by  it  to  former  enemy  owners  and  the  power  of  ultimate 
disposition  of  such  property  and  proceeds  of  sale,  so  preserved  by  the  Act 
itself,  have  been  confirmed  to  the  United  States  through  the  recent  treaties 
of  peace  by  the  Government  of  Germany,  Austria  and  Hungary,  on  behalf 
of  themselves,  respectively,  and  their  nationals.  (See  Treaties  of  Peace, 
all  ratified  by  the  Senate,  67th  Congress,  1st  Session,  October  18,  1921 ; 
with  Germany,  signed  August  25,  1921,  Senate  Document  No.  70;  with 
Austria,  signed  August  24,  1921,  Executive  Document  H;  with  Hungary 
signed  August  29,  1921,  Executive  Document  I.) 

These  treaties  with  but  minor  modifications  are  similar  in  tenor  and 
specifically  reserve  to  the  United  States  and  its  nationals  any  and  all 
rights,  privileges,  indemnities,  reparations,  or  advantages,  with  the  right 
to  enforce  the  same,  to  which  they  have  become  entitled  (a)  by  the  terms 
of  the  armistice  upon  which  peace  was  finally  concluded,  (b)  by  reason  of 
participation  of  the  United  States  in  the  war,  or  (c)  which  by  the  Treaties 
of  Versailles,  St.  Germain  and  Trianon,  were  stipulated  for  its  and  their 


20 

benefit,  and  (d)  by  reason  of  any  acts  of  Congress,  including  the  joint 
resolution  of  July  2,  1921  (Peace  Resolution)  declaring  the  several  states 
of  war  to  be  at  an  end. 

(a)     THE    PEACE   RESOLUTION. 

The  joint  resolution  contains  an  important  paragraph  which  is  here 
set  forth  in  full : 

"Sec.  5.  All  property  of  the  Imperial  German  Government, 
or  its  successor  or  successors,  and  of  all  German  nationals,  which 
was,  on  April  6,  1917,  in  or  has  since  that  date  come  into  the 
possession  or  under  control  of,  or  has  been  subject  of  a  demand 
by  the  United  States  of  America  or  of  any  of  its  officers,  agents, 
or  employees,  from  any  source  or  by  any  agency  whatsoever,  and 
all  property  of  the  Imperial  and  Royal  Austro-Hungarian  Gov- 
ernment, or  its  successor  or  successors,  and  of  all  Austro-Hun- 
garian nationals  which  was  on  December  7,  1917,  in  or  has  since 
that  date  come  into  the  possession  or  under  control  of,  or  has 
been  the  subject  of  a  demand  by  the  United  States  of  America 
or  any  of  its  officers,  agents,  or  employees,  from  any  source  or 
by  any  agency  whatsoever,  shall  be  retained  by  the  United  States 
of  America  and  no  disposition  thereof  made,  except  as  shall  have 
been  heretofore  or  specifically  hereafter  shall  be  provided  by  law 
(bold  face  ours)  until  such  time  as  the  Imperial  German  Govern- 
ment and  the  Imperial  and  Royal  Austro-Hungarian  Government 
or  their  successor  or  successors,  shall  have  respectively  made  suit- 
able provision  for  the  satisfaction  of  all  claims  against  said  Govern- 
ments respectively,  of  all  persons,  wheresoever  domiciled,  who  owe 
permanent  allegiance  to  the  United  States  of  America  and  who 
have  suffered,  through  the  acts  of  the  Imperial  German  Govern- 
ment, or  its  agents,  or  the  Imperial  and  Royal  Austro-Hungarian 
Government,  or  its  agents,  since  July  31,  1914,  loss,  damage,  or 
injury  to  their  persons  or  property,  directly  or  indirectly,  whether 
through  the  ownership  of  shares  of  stock  in  German,  Austro- 
Hungarian,  American,  or  other  corporations,  or  in  consequence 
of  hostilities  or  of  any  operations  of  war,  or  otherwise,  and  also 
shall  have  granted  to  persons  owing  permanent  allegiance  to  the 
United  States  of  America  most-favored-nation  treatment,  whether 
the  same  be  national  or  otherwise,  in  all  matters  affecting  resi- 
dence, business,  profession,  trade,  navigation,  commerce  and  in- 
dustrial property  rights,  and  until  the  Imperial  German  Govern- 
ment and  the  Imperial  and  Royal  Austro-Hungarian  Government, 
or  their  successor  or  successors,  shall  have  respectively  confirmed 
to  the  United  States  of  America  all  fines,  forfeitures,  penalties, 
and  seizures  imposed  or  made  by  the  United  States  of  America 
during  the  war,  whether  in  respect  to  the  property  of  the  Imperial 
German  Government  or  German  nationals  or  the  Imperial  and 
Royal  Austro-Hungarian  Government  or  Austro-Hungarian  na- 
tionals, and  shall  have  waived  any  and  all  pecuniary  claims 
against  the  United  States  of  America." 

(b)     TREATIES  OF  VERSAILLES,  ST.  GERMAIN  AND  TRIANON. 

The  treaties  of  peace,  for  the  purpose  of  defining  more  particular  any 
obligations  of  the  former  enemy  nations,  specifically  enumerate  in  para- 
graph (1)  of  Article  II  of  each  treaty  the  portions  of  the  Treaties  of 


21 

Versailles  (Germany),  St.  Germain  (Austria)  and  Trianon  (Hungary), 
under  which  the  rights  of  the  United  States  are  reserved,  and  include  those 
dealing  with  enemy  properties  in  the  United  States  and  the  action  past 
and  future  of  the  United  States  Government  with  respect  thereto. 

Our  discussion  will  be  confined  to  the  Treaty  of  Versailles,  as  that  is 
the  best  known,  and  the  cited  provisions  of  the  other  two  treaties  are  of 
like  import. 

As  between  the  United  States  and  its  nationals  on  the  one  hand  and 
Germany  and  her  nationals  on  the  other  hand,  all  acts  of  seizure,  sequestra- 
tion, administration,  management  and  sale  taken  by  the  United  States  and 
its  officials  are  confirmed  with  certain  exceptions  not  material  to  this 
discussion  (Art,  297;  (d),  Annex  1  and  3.) 

No  claim  or  action  can  be  brought  against  the  United  States  or  any 
person  acting  under  its  authority  by  Germany  or  her  nationals,  in  respect 
of  any  act  of  omission  or  commission  with  regard  to  his  property,  rights 
or  interests  during  the  war  or  in  preparation  for  war.  (Article  297, 
Annex  2.) 

Subject  to  the  reservations  in  the  Treaty,  the  United  States  has 
reserved  the  right  to  retain  and  liquidate  all  property,  rights  and  interests 
situate  in  the  United  States  on  October  18,  1921,  belonging  to  German 
nationals.  (Sec.  297  (b)  and  paragraph  (5)  Article  II,  Treaty  with  Ger- 
many). This  provision  would  authorize  the  United  States,  notwithstand- 
ing the  termination  of  the  war,  to  take  over  unsequestrated  property  of 
such  German  nationals  within  our  territory  and  to  liquidate  the  same. 
It  would,  of  course,  take  legislative  action  by  Congress  to  accomplish  this. 

The  Treaty  further  authorizes  the  United  States  to  retain  such  prop- 
erty or  to  use  the  same  in  the  payment  of  certain  claims  or  debts  therein 
defined  which  may  be  asserted  by  citizens  of  the  United  States  against 
the  German  Government  or  its  nationals.  (Article  297;  (e),  h  (1)  and 
h  (2),  Annex  4.) 

Germany  has  agreed  to  compensate  her  nationals  in  respect  of  the  sale 
and  retention  of  their  property,  rights  or  interests  in  the  United  States 
(Article  297  (1)  ). 

Special  provisions  relating  to  the  subject  of  patents,  copyrights  and 
trade-marks  may  be  found  in  articles  306-311,  inclusive;  however,  by 
Annex  15  to  Article  297,  it  is  specifically  provided  that  the  provisions  of 
that  Article  and  its  Annex  shall  apply  to  all  such  property  and  all  action 
that  has  been  taken  with  respect  thereto.  And  the  provision  validating 
all  actions  taken  by  the  United  States  in  this  respect  and  prohibiting 
German  nationals  from  making  claim  therefor  are  reaffirmed  with  par- 
ticular reference  to  these  classes  of  property  in  Article  306. 

In  the  same  Article  the  United  States  is  given  the  right  to  impose 
such  limitations,  conditions  and  restrictions  as  it  sees  fit  on  patents  and 
copyrights  acquired  by  German  nationals  before'  or  during  the  war  to 
such  extent  as  is  considered  necessary  for  national  defense;  or  in  the 
public  interest;  or  to  secure  fair  reciprocity  for  American  citizens;  or 
by  way  of  security  for  Germany's  obligations  under  the  Treaty.  As  to 


22 

patents  and  copyrights  obtained  after  the  war,  the  same  limitations  or 
restrictions  may  be  applied,  but  only 

«*    *    *    for  national  defense  or  in  the  public  interest." 

Transfers  of  patents,  copyrights  and  trademarks  effected  after  August 
1,  1914,  either  before  or  after  the  date  of  the  Treaty  which  would  have 
the  result  of  defeating  the  provisions  of  Article  306  are  voidable  at  the 
option  of  the  United  States. 

Article  297  and  its  Annex  and  Articles  306-311,  inclusive,  contain 
numerous  other  provisions  concerning  this  subject,  but  it  is  believed  that 
those  specifically  mentioned  above  cover  the  topic  with  which  we  are  here 
concerned. 

3.     METHOD   OF  SETTLING  WAR   CLAIMS   HERETOFORE 
FOLLOWED  BY  THE  UNITED  STATES. 

It  may  be  of  interest  to  note  the  action  that  has  been  taken  in  the 
United  States  concerning  claims  asserted  by  citizens  of  the  United  States 
against  foreign  governments,  and  those  asserted  by  citizens  of  those  gov- 
ernments against  it,  which  arose  during  wars  in  which  the  United  States 
has  heretofore  been  engaged. 

During  the  Revolutionary  War,  although  no  federal  act  had  been 
passed,  certain  of  the  individual  states  had  enacted  legislation  confiscating 
and  sequestrating  private  property  and  debts  belonging  to  British  subjects. 
The  Treaty  of  1782,  between  the  United  States  and  Great  Britain  (Malloy's 
Treaties  of  the  United  States,  Volume  1,  page  580)  provided  that  creditors 
on  either  side  should  meet  with  no  lawful  impediment  to  the  full  recovery 
of  all  bona  fide  debts  theretofore  contracted,  and  it  was  agreed  that  Con- 
gress should  recommend  to  the  respective  states  the  restitution  of  prop- 
erties confiscated  by  them.  In  order  to  enforce  this  Treaty  a  provision  was 
inserted  in  the  Constitution  providing  that  the  treaties  then  made,  or 
thereafter  made,  should  be  the  supreme  law  of  the  land.  However,  as  the 
results  obtained  under  this  Treaty  did  not  meet  all  expectations,  a  new 
treaty  was  entered  into  in  1794,  known  as  the  Jay  Treaty  (Malloy's  Treaties, 
Volume  1,  page  594,  597)  under  which  a  commission  was  established  for 
the  adjudication  of  debts  owing  to  British  subjects,  due  and  unpaid  by  the 
reason  of  the  operation  of  various  legal  impediments;  the  United  States 
agreeing  to  pay  according  to  the  adjudication  of  the  commission.  The 
commission  met,  but  was  unable  to  agree  on  certain  points,  and  after  long 
and  continuous  negotiations  a  convention  was  concluded  in  1802  (Malloy's 
Treaties,  Volume  1,  page  611)  under  the  terms  of  which  600,000  pounds 
was  accepted  by  Great  Britain  from  the  United  States  in  satisfaction  of 
what  the  United  States  might  have  been  liable  to  pay  under  the  Treaty 
of  1794  (See  Moore's  Digest  Int.  Law,  Volume  7,  page  310;  and  Moore's 
Int.  Arb.,  Volume  1,  page  271). 

Another  instance  of  settlement  as  between  governments  of  claims 
asserted  by  their  citizens  is  found  in  the  Treaty  of  Washington,  concluded 
between  the  United  States  and  Great  Britain  May  8, 1871  (Malloy's  Treaties, 


23 

Volume  1,  page  700),  under  which  provision  was  made  for  the  settlement 
by  an  arbitration  to  be  held  at  Geneva  of  claims  generally  known  as  the 
"Alabama  claims,"  arising  out  of  acts  committed  by  various  Confederate 
boats  during  the  Civil  War,  and  also  of  claims  of  citizens  of  the  United 
States  and  subjects  of  Great  Britain  arising  out  of  the  same  war. 

A  treaty  with  France  to  similar  effect  was  signed  July  4, 1831  (Malloy's 
Treaties,  Volume  1,  page  523),  under  which  France  agreed  to  pay  twenty- 
five  million  francs  to  liberate  itself  from  claims  asserted  by  citizens  of  the 
United  States  for  unlawful  captures,  sequestration,  confiscation  or  destruc- 
tion of  their  vessels  and  cargoes,  to  the  Government  of  the  United  States, 

"who  shall  distribute  it  among  those  entitled,  in  the  manner  and 
according  to  the  rules  which  it  shall  determine." 

The  United  States  likewise  paid  one  million  five  hundred  thousand  francs 
to  the  French  Government  for  similar  purposes. 

The  settlement  with  China  following  the  Boxer  uprising  (although  not 
constituting  a  war  in  which  the  United  States  was  engaged)  was  made  along 
like  lines  (Malloy's  Treaties,  Volume  2,  page  2006). 

The  most  recent  instance  outside  of  the  war  just  concluded  occurred 
following  our  war  with  Spain.  By  treaty  signed  December  10,  1908  (Mal- 
loy's Treaties,  Volume  2,  page  1690),  it  was  provided  in  Article  VII: 

"The  United  States  and  Spain  mutually  relinquish  all  claims 
for  indemnity,  national  and  individual,  of  every  kind,  of  either 
Government,  or  of  its  citizens  or  subjects,  against  the  other  Gov- 
ernment, that  may  have  arisen  since  the  beginning  of  the  late 
insurrection  in  Cuba  and  prior  to  the  exchange  of  ratifications  of 
of  the  present  treaty,  including  all  claims  for  indemnity  for  the 
cost  of  the  war. 

"The  United  States  will  adjudicate  and  settle  the  claims  of  its 
citizens  against  Spain  relinquished  in  this  article." 

In  concluding  this  section,  while  it  is  obvious  that  the  action  of  our 
Government  and  Congress  with  respect  to  the  settlement  of  claims  which 
may  be  asserted  by  Germany  and  Austro-Hungarian  subjects  for  the  return 
of  their  properties,  or  the  proceeds  of  the  sale  thereof,  can  not  be  anticipated 
at  this  time,  nevertheless,  it  is  just  as  obvious  that  Congress  enjoys  full 
power  to  dispose  of  such  properties  and  recognize  such  claims  in  whatever 
manner  it  may  determine.  Certainly,  the  reservations  that  have  been 
pointed  out  in  the  Trading  with  the  Enemy  Act,  and  the  subsequent  con- 
firmation of  the  same  to  the  United  States  by  the  former  enemy  govern- 
ments in  behalf  of  themselves  and  their  nationals,  intimate  that  Congress 
is  not  unmindful  of  the  necessity  of  at  least  holding  all  of  this  property  until 
such  time  as  the  recognition  and  payment  of  claims  of  citizens  of  the  United 
States  has  been  provided  for. 

That  such  claims  of  our  citizens  exist  in  number  is  evidenced  by  the 
report  of  the  Secretary  of  State  dated  March  2,  1921,  which  was  transmitted 
to  the  Senate  in  response  to  a  resolution  adopted  by  it  on  December  30, 
1920,  calling  for  a  report  with  respect  to  claims  against  Germany  filed  with 
the  Department  of  State  by  American  citizens  since  August,  1914  (see 
Senate  Document  No.  419,  66th  Congress,  3rd  Session) . 


24 

It  may  well  be  that  the  United  States  will  make  settlement  with  the 
several  former  enemy  governments  in  respect  of  such  individual  claims  as 
may  be  deemed  worthy  of  recognition.  But  in  view  of  the  provisions  of  the 
Trading  with  the  Enemy  Act  limiting  the  former  enemy  owners  whose 
claims  have  been  recognized  to  the  recovery  of  the  proceeds  of  sale  of  their 
property;  the  provisions  of  the  recent  treaties  of  peace  with  the  former 
enemy  governments  confirming  all  action  of  every  kind  taken  by  the  United 
States  and  its  officials  in  relation  to  the  sequestration  and  sale  of  enemy 
properties ;  and  in  view  of  the  precedents  above  cited,  it  may  be  presumed 
that  former  enemy  owners  will  never  be  permitted  to  maintain  individual 
claims  of  any  sort  involving  the  administration  and  sale  of  their  properties 
by  £he  Alien  Property  Custodian. 


PART  IV. 

THE    PATENT    CONVENTION    OF    1909    BETWEEN    THE    UNITED 

STATES  AND  GERMANY,  AND  ITS  REPUGNANCY  TO  THE 

SPIRIT  OF  OUR  PATENT  LAWS. 

The  German  hold  on  American  industry  was  maintained  in  part  at  least 
by  means  of  compliance  with  the  technical  requirements  of  our  patent 
statutes.  Nevertheless,  the  method  in  which  they  used  their  American 
patents — in  view  of  the  purposes  to  which  it  was  directed — was  not  in  har- 
mony with  the  fundamental  principles  of  patent  law  in  this  country. 

All  our  laws  regarding  the  granting  of  patent  and  copyright  privileges 
are  enacted  by  Congress  under  the  eighth  clause  of  the  eighth  section  of 
Article  One  of  the  Constitution  which  provides : 

"The  Congress  shall  have  power  .    .    . 

"To  promote  the  Progress  of  Science  and  useful  Arts,  by 
securing  for  limited  Times  to  Authors  and  Inventors  the  exclusive 
Right  to  their  respective  Writings  and  Discoveries;  .  .  ." 

A  brief  summary  of  the  introduction  and  adoption  of  this  clause  into 
the  Constitution  is  found  in  10  Fed.  Stat.  Ann.  2nd  Ed.  p.  165,  which  states 
in  full: 

"Charles  Pinckney's  speeches  show  that  his  draft  conferred 
power  on  the  general  Government  to  secure  to  authors  the  exclu- 
sive right  to  their  performances  and  discoveries,  but  Randolph's 
draft  contained  nothing  upon  the  subject,  nor  did  the  Committee 
of  Detail  insert  any  such  provision  in  the  draft  of  August  6. 

"On  August  18,  however,  Madison  introduced  and  had  referred 
to  the  Committee  of  Detail  a  series  of  powers  to  be  conferred  on 
the  Congress,  among  which  were  the  following: 

"To  secure  to  literary  authors  their  copyrights  for  a  limited 
time. 

"To  encourage,  by  proper  premiums  and  provisions,  the  ad- 
vancement of  useful  knowledge  and  discoveries. 

"On  the  same  day,  also,  Charles  Pinckney  had  referred  to  the 
same  committee  powers  suggested  by  him,  among  which  were 
the  following: 


25 

"To  grant  patents  for  useful  inventions. 

"To  secure  to  authors  exclusive  rights  for  a  certain  time. 

"To  establish  public  institutions,  rewards  and  immunities  for 
the  promotion  of  agriculture,  commerce,  trade  and  manufactures." 

"The  Committee  of  Detail  did  not  report  on  these  suggestions, 
and  they  accordingly  went  to  the  Committee  on  Unfinished  Por- 
tions, and  they  reported  on  September  5,  recommending  to  insert 
before  the  last  clause  of  Section  1,  Article  VII,  the  following: 
'to  promote  the  progress  of  science  and  the  useful  arts,  by  securing 
for  limited  times,  to  authors  and  inventors,  the  exclusive  right  to 
their  respective  writings  and  discoveries' ;  and  this  was  soon  agreed 
to  nem.  con.  In  this  form  this  matter  was  later  referred  to  the 
Committee  on  Style,  and  they  reported  it  as  follows : 

"To  promote  the  progress  of  science  and  useful  arts,  by  secur- 
ing, for  limited  times,  to  authors  and  inventors,  the  exclusive  right 
to  their  respective  writings  and  discoveries." 

Story,  in  his  Commentaries  on  the  Constitution,  says  of  this  power  of 
Congress : 

".  .  .This  power  did  not  exist  under  the  Federation :  and  its 
utility  does  not  seem  to  have  been  questioned.  ...  It  was  bene- 
ficial to  all  parties  that  the  national  government  should  possess 
this  power;  to  authors  and  inventors,  because  otherwise  they 
would  have  been  subjected  to  the  varying  laws  and  systems  of  the 
different  states  on  this  subject  which  would  impair  and  might 
even  destroy  the  value  of  their  rights;  to  the  public  as  it  would 
promote  the  progress  of  science  and  the  useful  arts,  and  admit 
the  people  at  large,  after  a  short  interval  to  the  full  possession 
and  enjoyment  of  all  writings  and  inventions  without  restraint. 
.  .  ."  (Vol.  3,  p.  48,  Chap.  XIX.) 

The  same  thought  is  expressed  in  The  Federalist  in  its  brief  comment 
on  this  power  (Paper  XLII)  which  states  in  part:  "The  public  good  fully 
coincides  in  both  cases  (copyrights  and  patents)  with  the  claims  of  individ- 
uals." (The  foregoing  parenthesis  is  our  insert.) 

Although  the  purpose  of  this  provision  is  clear  from  its  reading,  it 
may  be  of  interest  to  note  the  expression  of  Judge  Deady  in  the  case  of 
Martinetti  v.  Maguire  (1867)  16  Fed.  Gas.  No.  9173;  1  Abb.  356,  Deady 
216: 

"...  But  the  benefit  of  copyright  is  a  privilege  conferred 
by  Congress  in  pursuance  of  the  Constitution  of  the  United  States 
.  .  .  Besides,  the  power  to  pass  what  are  called  copyright  and 
patent  laws,  or  as  the  constitution  expressed  it,  to  secure  'for 
limited  times  to  authors  and  inventors  the  exclusive  right  to  their 
respective  writings  and  discoveries,'  is  given  not  generally,  but 
only  as  a  means  to  a  particular  end  'to  promote  the  progress  of 
science  and  useful  arts.'  Const.  Art.  1,  S  8,  Subd.  8.  Hence,  it 
expressly  appears  that  Congress  is  not  empowered  by  the  Con- 
stitution to  pass  laws  for  the  protection  or  benefit  of  authors  and 
inventors,  except  as  a  means  of  promoting  the  progress  of  "Sci- 
ence and  useful  arts."  .  .  ." 

Similarly,  Justice  Fuller  said  in  United  States  v.  Duell  (1898),  172 
U.  S.  576,  583;  43  L.  Ed.  559,  562: 

"Since  under  the  Constitution  Congress  has  power  'to  pro- 
mote the  progress  of  science  and  useful  arts  by  securing  for  lim- 


26 

ited  times  to  authors  and  inventors  the  exclusive  right  to  their 
respective  writings  and  discoveries'  and  to  make  all  laws  which 
shall  be  necessary  and  proper  for  carrying  that  expressed  power 
into  execution,  it  follows  that  Congress  may  provide  such  instru- 
mentalities in  respect  of  securing  to  inventors  the  exclusive  right 
to  their  discoveries  as  in  its  judgment  will  be  best  calculated  to 
effect  that  object." 

And  this  provision  of  the  Constitution  was  not  enacted  in  recognition 
of  any  existing  rights  in  inventions  by  reason  of  the  common  law.  Patents 
in  England  were  from  early  times  a  grant  of  the  sovereign  and  the  pur- 
poses underlying  such  grants  as  expressed  by  Coke  in  his  Institutes,  Vol. 
Ill,  Chap.  85,  p.  181,  were  of  similar  tenor  to  those  expressed  in  our  Con- 
stitution. He  says  in  part : 

".  .  .  the  reason  wherefore  such  a  privilege  is  good  in 
law  is,  because  the  inventor  bringeth  to  and  for  the  common 
wealth  a  new  manufacture  by  his  invention,  cost  and  charges, 
and  therefore  it  is  reason,  that  he  should  have  a  privilege  for 
his  reward  (and  the  encouragement  of  others  in  the  like)  for  a 
convenient  time ;  .  .  ." 

In  the  United  States  it  has  been  held  in  several  decisions  that  Con- 
gress, instead  of  sanctioning  an  existing  right,  created  it — that  the  right 
is  created  by  the  patent.  See  Wheaton  v.  Peters  (1834),  8  Pet.  (U.  S.) 
591;  8  L.  Ed.  1055;  Gayler  v.  Wilder  (1850),  10  How.  (U.  S.)  477;  13  L. 
Ed.  504;  Hartman  v.  Park  &  Sons  Co.  (1906),  145  Fed.  358. 

It  was,  then,  under  the  provisions  of  our  Constitution  and  the  laws 
enacted  to  effect  its  object,  "to  promote  the  progress  of  science  and  the 
useful  arts,"  that  these  patents,  seized  and  sold  by  the  Custodian  in  order 
to  eliminate  alien  interests  hostile  and  detrimental  to  the  prosperity  of 
the  United  States,  were  obtained.  Certainly  our  laws — enacted  for  such 
purposes — were  never  intended  to  shield  and  protect  patentees  who  used 
their  statutory  privileges,  not  only  to  the  detriment  but  also  to  endanger 
the  lives  and  property  of  the  people  through  whom  such  privileges  were 
granted. 

As  was  said  in  Kendall  v.  Windsor  (1859),  62  U.  S.  (L.  Ed.)  165,  167, 
168  (21  How.  U.  S.)  322: 

".  .  .  It  is  undeniably  true  that  the  limited  and  temporary 
monopoly  granted  to  inventors  was  never  designed  for  their  ex- 
clusive profit  or  advantage ;  the  benefit  to  the  public  or  community 
at  large  was  another  and  doubtless  the  primary  object  in  granting 
and  securing  that  monopoly.  ...  By  correct  induction  from 
these  truths,  it  follows  that  the  inventor  who  designedly,  and 
with  a  view  of  applying  it  definitely  and  exclusively  for  his  own 
profit,  withholds  his  invention  from  the  public,  comes  within  the 
policy  or  objects  of  the  Constitution  or  Acts  of  Congress.  He 
does  not  promote,  and  if  aided  in  his  design,  would  impede  the 
progress  of  science  and  the  useful  arts.  And  with  a  very  bad 
grace  would  he  appeal  for  favor  or  protection  to  that  society 
which,  if  he  had  not  injured,  he  certainly  had  neither  benefited, 
or  intended  to  benefit  .  .  .  the  rights  and  interests,  whether  of 
the  public  or  of  individuals,  can  never  be  made  to  yield  to  schemes 


27 

of  selfishness  or  cupidity;  moreover  that  which  is  once  given  to 
or  is  invested  in  the  public  cannot  be  recalled  nor  taken  from 
them.  .  .  .  Whilst  the  remuneration  of  genius  and  useful  inge- 
nuity is  a  duty  upon  the  public,  the  rights  and  welfare  of  the 

community  must  be  fairly  dealt  with  and  effectively  guarded. 
*  *  *  » 

After  citing  and  quoting  from  the  above  case,  and  from  Justice  Story's 
opinion  in  Penmock  v.  Dialogue  (1829,  2  Pet.  (U.  S.)  1;  7  L.  Ed.  327;  the 
court  in  Macbeth  Evans  Glass  Co.  v.  General  Electric  Co.  (1916)  231  Fed. 
183,  185,  said: 

".  .  .  Whether  or  not  these  conclusions,  as  to  what  are  the 
principles  upon  which  our  patent  laws  are  founded  were  strictly 
necessary  to  the  decisions  of  the  cases  in  which  they  were  ex- 
pressed, commending  themselves  as  they  do  to  sound  thinking, 
they  must  be  accepted  as  a  correct  statement  of  the  principles 
and  policy  of  that  law  which  should  guide  us  in  the  application  of 
it  to  this  case.  .  .  ." 

And  this  extensive  foreign  hold  upon  the  chemical  industry  of  our 
country  was  insured,  as  our  laws  did  not  require  the  working  of  the 
patents  within  the  United  States  or  the  granting  of  any  compulsory 
licenses  in  case  the  patents  were  not  worked  after  a  reasonable  period  of 
time  following  their  issuance.  The  imposing  of  such  restrictions  on  foreign 
patents  in  the  United  States  has  been  heretofore  considered  by  Congress 
but  failed  of  enactment;  and  our  Government  in  diplomatic  relations  has 
urged  that  no  such  limitations  should  be  placed  on  American  patents 
abroad.  However,  it  may  readily  be  assumed  that  such  action  was  taken 
with  no  idea  that  foreigners  would  use  their  privileges  under  our  laws  to 
ends  detrimental  to  the  public  welfare,  and  without  considering  fully  the 
situation  that  would  arise  in  event  of  war  involving  the  United  States. 

In  his  annual  report  for  the  year  1908  (page  XII),  Commissioner  of 
Patents  Moore  says : 

"It  is  to  be  hoped  that  in  the  near  future  treaties  with  the 
leading  commercial  nations  may  be  consummated  embracing  re- 
ciprocal provisions  which  will  relieve  inventors  and  manufac- 
turers from  the  necessity  of  working  their  inventions  in  the 
respective  countries." 

In  his  report  for  the  year  1909  (page  IX)  he  says: 

"Negotiations  are  now  pending  between  the  United  States 
and  foreign  countries  looking  to  conventions  being  entered  into 
by  the  various  countries  for  the  elimination  of  the  so-called 
'working  clause'  in  all  Patent  Laws. 

"A  treaty  of  this  kind  has  recently  been  negotiated  with 
Germany  and  is  now  in  force;  also  the  working  clause  in  the 
Patent  Law  of  Sweden  and  Switzerland  has  recently  been  elim- 
inated. It  is  to  be  hoped  that  in  the  near  future  the  laws  of  all 
foreign  countries  now  embracing  this  so-called  working  clause 
will  be  so  modified  that  its  provisions  will  be  entirely  eliminated." 

And  in  his  annual  report  for  1910  (page  X) : 

"Several  treaties  have  been  entered  into  with  foreign  coun- 
tries and  the  laws  of  several  countries  have  been  changed  in 
regard  to  the  so-called  working  clause. 


28 

"Previously,  if  an  invention  of  an  American  citizen  was 
patented  in  this  country  and  also  abroad,  and  this  invention  was 
not  worked  abroad,  the  products  could  not  be  sold  in  these  coun- 
tries; if  they  were  manufactured  solely  in  the  United  States. 
The  United  States  law  does  not  embrace  any  such  provision  and 
never  has.  When  the  fact  was  brought  to  the  attention  of 
many  nations,  they  took  it  under  serious  consideration,  with  the 
result  that  now  in  many  of  these  countries  it  is  not  necessary 
for  an  American  manufacturer  to  duplicate  his  plant  in  all  other 
countries  in  which  he  wishes  to  sell  his  goods. 

"A  notable  case  is  the  Treaty  with  Germany  which  the  De- 
partment of  State  sent  me  abroad  to  negotiate  and  with  which 
success  crowned  the  efforts  made.  A  treaty  was  entered  into 
with  the  German  Empire,  which,  in  its  broad  workings,  had  the 
effect  of  not  only  protecting  the  American  inventor  but  the 
.German  inventor  as  well.  The  Treaty  has  been  construed  by 
the  Imperial  Court  sitting  at  Leipsig,  and  its  provisions  were 
upheld  in  some  of  the  patents  which  had  been  declared  forfeited 
and  they  were  ordered  to  be  restored  by  the  German  Patent  Office. 
That  treaty  is  still  in  force.  Treaties  with  other  countries  of 
like  import  are  now  pending." 

However,  no  other  treaties  were  in  fact  negotiated. 

In  his  report  for  the  year  1911  (page  XIII),  the  Commissioner  says: 

"During  the  conference  (held  at  Washington  in  May  and 
June,  1911)  I  received  a  cablegram  which  stated  that  the  German 
Reichstag  had  passed  a  patent  law  which  upheld  the  treaty 
between  Germany  and  the  United  States  providing  that  patents 
of  American  inventors  should  not  be  revoked  by  the  German 
Government  for  failure  to  work  or  manufacture  the  same  in 
Germany  within  four  years,  provided,  however,  the  same  is  manu- 
factured in  the  United  States  in  the  same  period  of  time.  This 
so-called  working  clause  is  embraced  in  the  laws  of  nearly  all 
nations;  but  since  the  treaty  with  Germany  has  been  entered 
into,  several  of  them  have  modified  their  laws  in  this  respect. 
This  treaty  was  the  result  of  certain  negotiations  instituted  by 
me  while  in  Berlin  in  1908,  while  acting  under  the  direction  of 
the  Secretary  of  State.  In  the  following .  year  I  again  visited 
Germany  in  the  interest  of  this  treaty  and  also  visited  several 
other  countries  at  the  direction  of  Secretary  of  State  Knox  and 
Assistant  Secretary  Huntingdon  Wilson,  and  the  result  has  been 
the  revision  of  the  laws  relating  to  the  working  clause  in  Norway, 
Sweden  and  Switzerland,  so  that  the  manufacture  of  patented 
inventions  in  those  countries  by  the  United  States  citizens  is  no 
longer  required  in  order  to  sustain  their  patents.  It  is  thought 
that  several  other  countries  will  speedily  follow  this  example." 

A  statement  from  Commissioner  Moore,  referred  to  the  Senate  Com- 
mittee on  Patents  April  11,  1912,  transmitting  copy  of  a  proposed  bill  to 
codify  the  laws  relating  to  patents,  says,  among  other  things  (62  Cong. 
2d  sess.  Sen.  Doc.  555,  pp.  7-8) : 

"Section  17  comprises  section  4884  revised  statutes  as  it 
now  stands  with  the  addition  of  two  amendments.  .  .  .  The 
second  amendment  to  this  section  comprises  a  clause  providing 
that  if  the  invention  is  not  adequately  worked  or  manufactured 


29 

within  the  United  States  at  any  time  after  the  expiration  of  the 
first  four  years,  the  owner  of  the  patent  may  be  compelled  to 
license  any  person  who  shall  demand  the  same  to  manufacture, 
use  and  sell  the  patented  invention  upon  such  terms  as  may  be 
prescribed  by  the  Judge  of  the  Court  of  the  district  in  which 
the  owner  of  the  patent  resides  or  has  an  established  place  of 
business.  Nearly  all  countries  except  the  United  States  have 
provisions  of  law  requiring  the  working  of  a  patented  invention 
and  in  the  event  of  failure  to  adequately  work  the  invention 
that  the  patent  shall  either  be  revoked  or  that  the  owner  thereof 
shall  be  required  to  grant  a  license  to  others  to  manufacture, 
use  and  sell  the  same. 

"In  my  opinion  the  so-called  working  clause  contained  in 
the  laws  of  other  countries  is  of  such  drastic  nature  as  to  dis- 
courage invention. 

"While,  of  course,  it  is  desirable  that  valuable  inventions 
shall  be  manufactured  and  sold  within  a  reasonable  period,  from 
the  date  of  the  grant  of  the  patent  and  not  locked  up  by  large 
corporations  as  is  now  the  case  in  some  instances,  it  is  believed 
that  the  inventor  or  owner  of  the  patent  should  in  no  case  be 
deprived  of  a  reasonable  remuneration  for  the  invention  which 
he  has  patented  and  thus  disclosed  to  the  public.  In  the  amend- 
ment which  I  prepared  to  this  section  it  is  provided  that  if  the 
patented  invention  is  not  worked  to  an  adequate  extent  after 
the  expiration  of  the  first  four  years  any  person  may  demand  a 
license  to  manufacture  and  sell  the  same,  and  upon  refusal  of 
the  patentee  to  grant  such  license,  shall  have  the  right  to  apply 
to  the  court  of  the  district  in  which  the  owner  of  the  patent 
resides  or  has  an  established  place  of  business  and  to  demand  an 
order  from  the  Judge  requiring  that  the  owner  of  the  patent 
shall  grant  to  him  a  license  to  manufacture,  use  and  sell  the 
invention  upon  such  terms,  conditions,  security,  etc.,  as  in  the 
opinion  of  the  court  will  be  just.  It  is  believed  that  such  a 
measure  will  have  the  effect  of  placing  all  valuable  inventions 
in  public  use  within  a  reasonable  time,  and  will  also  encourage 
the  establishment  of  manufactories  for  the  production  of  patented 
machines,  devices,  etc.,  which  have  been  patented  by  persons 
who  are  not  citizens  of  the  United  States. 

"Care  has  been  taken  in  drafting  this  section  to  provide  that 
nothing  shall  conflict  with  any  treaty  or  convention  of  other  coun- 
tries which  reciprocally  lessens  the  force  of  its  application  to  the 
citizens  of  the  contracting  countries." 

The  legislation  thus  suggested  by  the  Commissioner  was  not  enacted. 

After  the  outbreak  of  the  great  war  in  1914,  and  especially  after  the 
United  States  had  become  a  party  to  it,  it  was  acutely  realized  that  by  the 
absence  of  necessary  drugs  and  chemicals  not  only  the  industrial  future 
of  the  country  was  endangered,  but  also  the  very  safety  and  health  of 
soldier  and  civilian.  American  factories  were  not  equipped  to  produce 
adequately  many  of  these  essentials  which  prior  to  the  war  had  been 
supplied  by  imports,  protected  by  the  United  States  patents  and  the  absence 
of  working  requirements  in  our  law. 

Although  shortly  after  the  outbreak  of  the  war  a  bill  was  introduced 
to  relieve  this  situation  by  the  suspension  of  enemy-owned  patents,  its 


30 

purpose  was  met  for  the  time  being  by  the  adoption  of  Section  10  of  the 
Trading  with  the  Enemy  Act,  permitting  the  licensing  of  such  patents. 
Mr.  Thomas  Ewing,  Commissioner  of  Patents,  in  a  letter  to  the  Attor- 
ney General,  dated  May  11,  1917,  in  explanation  of  the  provisions  of  Section 
10,  said  in  part: 

"...  Moreover,  in  the  patent  laws  of  many  of  the  foreign 
countries  there  are  general  provisions  for  the  granting  of  com- 
pulsory licenses.  These  provisions  were  not  found  to  be  of  much 
importance  and  were  in  many  respects  disadvantageous  prior  to  the 
outbreak  of  the  war,  but  since  the  outbreak  of  the  war,  they  have 
become  important  in  connection  with  enemy-owned  patents. 

"Our  Government  may  supply  its  own  needs  under  the  exist- 
ing laws  either  directly  or  through  contractors  who  are  protected 
against  suit  or  interference,  the  only  remedy  to  the  patentee  being 
recovery  through  the  Court  of  Claims.  But  the  needs  of  state 
governments  and  municipalities,  and  private  citizens  cannot  be 
supplied  in  this  way.  It  is,  therefore,  suggested  that  our  patent 
statute  be  amended  to  provide  that  whenever  a  state  of  war  exists, 
the  Federal  Trade  Commission  may  grant  licenses  under  enemy- 
owned  patents."  (Congressional  Record,  July  9,  1917,  p.  4859.) 

All  of  the  discussion  on  this  section  of  the  Act,  which  may  be  readily 
referred  to  in  the  Congressional  Record,  is  of  interest  in  this  connection  and 
has  a  distinct  bearing  on  the  action  of  Congress  in  subsequently  amending 
Section  7  (c)  of  the  Act  to  include  the  seizure  of  patents,  as  soon  as  it 
learned  of  the  purposes  to  which  they  had  been  put  by  the  enemy  nationals. 

And  the  treaty  with  Germany  of  1909,  which  the  United  States  entered 
into  thinking  it  would  advance  science  in  its  various  ramifications,  was,  so 
far  as  Germany  was  concerned,  a  part  of  its  program  for  commercial 
supremacy.  Prior  to  the  enactment  of  this  treaty,  the  so-called  working 
clause  in  the  German  law  required  inventions  patented  in  Germany  to  be 
worked  within  a  certain  time.  There  were  many  proponents  in  this  country 
who  urged  that  we  should  insure  the  future  of  this  country  by  similar  laws. 
By  1908  Germany  had  concluded  that  her  position  in  science  was  so  strong 
that  the  working  clause  might  be  waived  without  prejudice,  and  anticipated 
the  disastrous  effects  that  the  adoption  of  such  a  clause  in  the  United  States 
would  have  on  her  purposes.  Acting  under  instructions  from  the  con- 
solidated government  and  chemical  industries  of  Berlin,  the  president  of 
the  Bayer  Chemical  Company  called  upon  Commissioner  Moore  of  the  U.  S. 
Patent  Office  in  Washington.  He  urged  that  Mr.  Moore,  representing  the 
United  States,  should  attend  the  International  Patent  Convention  about 
to  be  held  in  Stockholm.  Mr.  Moore  responded  that  no  funds  were  available 
to  pay  for  the  expenses  of  such  a  trip.  (On  April  24,  1908,  the  Secretary 
of  the  Treasury  transmitted  a  communication  from  the  Secretary  of  the 
Interior  requesting  an  appropriation  of  $1,200  to  cover  expenses  of  a  dele- 
gate to  attend  the  above-mentioned  convention  at  Stockholm.  See  House 
Document  No.  885,  60th  Cong.  1st  Session.  The  appropriation  was  not 
made.)  Mr.  Moore  then  went  on  his  vacation.  Following  this  Mr.  Muurling, 
the  then  American  voice  of  Germany's  chemical  interests,  went  to  Robert 
Bacon,  then  Acting  Secretary  of  State,  drew  a  picture  of  the  United  States 


31 

unrepresented  at  that  great  conference  and  pointed  out  "that  the  State 
Department  had  moneys  from  which  sufficient  funds  could  be  drawn  for  the 
purpose  of  this  trip.  The  result  was  that  Mr.  Moore  was  recalled  from  his 
vacation  and  sent  abroad.  Through  German  activity  Mr.  Moore  was  induced 
to  go  from  Stockholm  to  Berlin,  where,  having  been  feted  and  entertained  by 
the  Kaiser  himself,  he  returned  to  negotiate  the  treaty  of  1909  under  which 
German  citizens  were  released  from  ever  working  their  chemical  patents  in 
this  country.  The  loyalty  of  Mr.  Robert  Bacon  and  Commissioner  Moore  is 
above  question,  but  by  this  action  they  unwittingly  and  unconsciously  aided 
Germany  in  completing  her  commercial  program. 


APPENDIX  1. 

EXCERPTS  FROM  TRADING  WITH  THE  ENEMY  ACT  AND 
AMENDMENTS  THERETO. 

EXCERPT  FROM  SECTION  2. 

Section  2.    That  the  word  "enemy",  as  used  herein,  shall  be  deemed  to 
mean,  for  the  purposes  of  such  trading  and  of  this  Act — 

(a)  Any  individual,  partnership,  or  other  body  of  individuals,  of  any 
nationality  resident  within  the  territory  (including  that  occupied  by  the 
military  and  naval  forces)  of  any  nation  with  which  the  United  States  is  at 
war,  or  resident  outside  the  United  States  and  doing  business  within  such 
territory,  and  any  corporation  incorporated  within  such  territory  of  any 
nation  with  which  the  United  States  is  at  war  or  incorporated  within  any 
country  other  than  the  United  States  and  doing  business  within  such 
territory. 

(b)  The  government  of  any  nation  with  which  the  United  States  is  at 
war,  or  any  political  or  municipal  subdivision  thereof,  or  any  officer,  official, 
agent  or  agency  thereof. 

(c)  Such  other  individuals,  or  body  or  class  of  individuals,  as  may  be 
natives,  citizens,  or  subjects  of  any  nation  with  which  the  United  States  is 
at  war,  other  than  citizens  of  the  United  States,  wherever  resident  or  where- 
ever  doing  business,  as  the  President,  if  he  shall  find  the  safety  of  the 
United  States  or  the  successful  prosecution  of  the  war  shall  so  require,  may, 
by  proclamation,  include  within  the  term  "enemy." 

The  words  "ally  of  enemy,"  as  used  herein,  shall  be  deemed  to  mean — 

(a)  Any  individual,  partnership,  or  other  body  of  individuals  resident 
within  the  territory   (including  that  occupied  by  the  military  and  naval 
forces)  of  any  nation  which  is  an  ally  of  a  nation  with  which  the  United 
States  is  at  war,  or  resident  outside  the  United  States  and  doing  business 
within  such  territory  of  such  ally  nation,  or  incorporated  within  any  country 
other  than  the  United  States  and  doing  business  within  such  territory. 

(b)  The  government  of  any  nation  which  is  an  ally  of  a  nation  with 
which  the  United  States  is  at  war,  or  any  political  or  municipal  subdivision 
of  such  ally  nation,  or  any  officer,  official,  agent,  or  agency  thereof. 


32 

(c)  Such  other  individuals,  or  body  or  class  of  individuals,  as  may  be 
natives,  citizens,  or  subjects  of  any  nation  which  is  an  ally  of  a  nation  with 
which  the  United  States  is  at  war,  other  than  citizens  of  the  United  States, 
wherever  resident  or  wherever  doing  business,  as  the  President,  if  he  shall 
find  the  safety  of  the  United  States  or  the  successful  prosecution  of  the 
war  shall  so  require,  may,  by  proclamation,  include  within  the  term  "ally 
of  enemy." 

EXCERPT  FROM  SECTION  5  (a). 

"  .  .  and  the  President  may  exercise  any  power  or  authority 
conferred  by  this  Act  through  such  officer  or  officers  as  he  shall 
direct.  .  .  ." 

EXCERPT  FROM  SECTION  6. 

Sec.  6.  That  the  President  is  authorized  to  appoint,  prescribe  the  duties 
of,  and  fix  the  salary  (not  to  exceed  $5,000  per  annum)  of  an  official  to  be 
known  as  the  Alien  Property  Custodian,  who  shall  be  empowered  to  receive 
all  money  and  property  in  the  United  States  due  or  belonging  to  an  enemy, 
or  ally  of  enemy,  which  may  be  paid,  conveyed,  transferred,  assigned,  or 
delivered  to  said  custodian  under  the  provisions  of  this  Act;  and  to  hold, 
administer,  and  account  for  the  same  under  the  general  direction  of  the 
President  and  as  provided  in  this  Act.  ..." 

SECTION  7  (c)  as  originally  enacted. 

If  the  President  shall  so  require,  any  money  or  other  property  belonging 
to  or  held  for,  by,  on  account  of,  or  on  behalf  of,  or  for  the  benefit  of  an 
enemy  or  ally  of  enemy  not  holding  a  license  granted  by  the  President  here- 
under,  which  the  President  after  investigation  shall  determine  is  so  owing 
or  so  belongs  or  is  so  held,  shall  be  conveyed,  transferred,  assigned,  deliv- 
ered, or  paid  over  to  the  Alien  Property  Custodian. 

SECTION  7  (c)  as  amended  November  4,  1918. 

(1)  ALIEN  PROPERTY  CUSTODIAN:  Subsection  (c)  of  seven  of 
the  "Trading  with  the  enemy  Act"  approved  October  6,  1917,  is  amended 
to  read  as  follows : 

"(c)  If  the  President  shall  so  require  any  money  or  other 
property  including  (but  not  thereby  limiting  the  generality  of  the 
above)  patents,  copyrights,  applications  therefor,  and  rights  to 
apply  for  the  same,  trade-marks,  choses  in  action,  and  rights  and 
claims  of  every  character  and  description  owing  or  belonging  to  or 
held  for,  by,  on  account  of,  or  on  behalf  of,  or  for  the  benefit  of, 
an  enemy  or  ally  of  enemy  not  holding  a  license  granted  by  the 
President  hereunder,  which  the  President  after  investigation  shall 
determine  is  so  owing  or  so  belongs  or  is  so  held,  shall  be  conveyed, 
transferred,  assigned,  delivered,  or  paid  over  to  the  Alien  Property 
Custodian,  or  the  same  may  be  seized  by  the  Alien  Property  Cus- 
todian ;  and  all  property  thus  acquired  shall  be  held,  administered, 
and  disposed  of  as  elsewhere  provided  in  this  Act. 
"Any  requirement  made  pursuant  to  this  Act,  or  a  duly  certi- 


33 

copy  thereof,  may  be  filed,  registered,  or  recorded  in  any  office 
for  the  filing,  registering,  or  recording  of  conveyances,  transfers, 
or  assignments  of  any  such  property  or  rights  as  may  be  covered 
by  such  requirement  (including  the  proper  office  for  filing,  regis- 
tering, or  recording  conveyances,  transfers,  or  assignments  of 
patents,  copyrights,  trade-marks,  or  any  rights  therein  or  any 
other  rights) ;  and  if  so  filed,  registered,  or  recorded  shall  impart 
the  same  notice  and  have  the  same  force  and  effect  as  a  duly 
executed  conveyance,  transfer,  or  assignment  to  the  Alien  Property 
Custodian  so  filed,  registered,  or  recorded. 

"Whenever  any  such  property  shall  consist  of  shares  of  stock 
or  other  beneficial  interest  in  any  corporation,  association,  or 
company,  or  trust,  it  shall  be  the  duty  of  the  corporation,  associa- 
tion, or  company  or  trustee  or  trustees  issuing  such  shares  or  any 
certificates  or  other  instruments  representing  the  same  or  any 
other  beneficial  interest  to  cancel  upon  its,  his,  or  their  books  all 
shares  of  stock  or  other  beneficial  interest  standing  upon  its,  his  or 
their  books  in  the  name  of  any  person  or  persons,  or  held  for,  on 
account  of,  or  on  behalf  of,  or  for  the  benefit  of  any  person  or 
persons  who  shall  have  been  determined  by  the  President,  after 
investigation,  to  be  an  enemy  or  ally  of  enemy,  and  which  shall 
have  been  required  to  be  conveyed,  transferred,  assigned  or  de- 
livered to  the  Alien  Property  Custodian  or  seized  by  him,  and  in 
lieu  thereof  to  issue  certificates  or  other  instruments  for  such 
shares  or  other  beneficial  interests  to  the  Alien  Property  Custodian 
or  otherwise,  as  the  Alien  Property  Custodian  shall  require. 

"The  sole  relief  and  remedy  of  any  person  having  any  claim 
to  any  money  or  other  property  heretofore  or  hereafter  conveyed, 
transferred,  assigned,  delivered,  or  paid  over  to  the  Alien  Property 
Custodian,  or  required  so  to  be  or  seized  by  him  shall  be  that 
provided  by  the  terms  of  this  Act,  and  in  the  event  of  sale  or  other 
disposition  of  such  property  by  the  Alien  Property  Custodian, 
shall  be  limited  to  and  enforced  against  the  net  proceeds  received 
therefrom  and  held  by  the  Alien  Property  Custodian  or  by  the 
Treasurer  of  the  United  States." 

SECTION  9  AS  ORIGINALLY  ENACTED. 

"Section  9.  That  any  person,  not  an  enemy,  or  ally  of  enemy, 
claiming  any  interest,  right,  or  title  in  any  money  or  other  prop- 
erty which  may  have  been  conveyed,  transferred,  assigned,  de- 
livered, or  paid  to  the  alien  property  custodian  hereunder,  and 
held  by  him  or  by  the  Treasurer  of  the  United  States,  or  to  whom 
any  debt  may  be  owing  from  an  enemy,  or  ally  of  enemy,  whose 
property  or  any  part  thereof  shall  have  been  conveyed,  transferred, 
assigned,  delivered,  or  paid  to  the  alien  property  custodian  here- 
under, and  held  by  him  or  by  the  Treasurer  of  the  United  States, 
may  file  with  the  said  custodian  a  notice  of  his  claim  under  oath 
and  in  such  form  and  containing  such  particulars  as  the  said 
custodian  shall  require ;  and  the  President,  if  application  is  made 
therefor  by  the  claimant,  may,  with  the  assent  of  the  owner  of 
said  property  and  of  all  persons  claiming  any  right,  title  or  interest 
therein,  order  the  payment,  conveyance,  transfer,  assignment  or 
delivery  to  said  claimant  of  the  money  or  other  property  so  held 
by  the  alien  property  custodian  or  by  the  Treasurer  of  the  United 
States  or  of  the  interest  therein  to  which  the  President  shall 


34 

determine  said  claimant  is  entitled :  Provided,  that  no  such  order 
by  the  President  shall  bar  any  person  from  the  prosecution  of  any 
suit  at  law  or  in  equity  against  the  claimant  to  establish  any  right, 
title  or  interest  which  he  may  have  in  such  money  or  other  prop- 
erty. If  the  President  shall  not  so  order  within  sixty  days  after 
the  filing  of  such  application,  or  if  the  claimant  shall  have  filed 
the  notice  as  above  required  and  shall  have  made  no  application 
to  the  President,  said  claimant  may,  at  any  time  before  the  expira- 
tion of  six  months  after  the  end  of  the  war,  institute  a  suit  in 
equity  in  the  district  court  of  the  United  States  for  the  district  in 
which  such  claimant  resides,  or,  if  a  corporation,  where  it  has  its 
principal  place  of  business  (to  which  suit  the  alien  property  cus- 
todian or  the  Treasurer  of  the  United  States,  as  the  case  may  be, 
shall  be  made  a  party  defendant) ,  to  establish  the  interest,  right, 
title,  or  debt  so  claimed,  and  if  suit  shall  be  so  instituted  then 
the  money  or  other  property  of  the  enemy,  or  ally  of  enemy, 
against  whom  such  interest,  right,  or  title  is  asserted,  or  debt 
claimed,  shall  be  retained  in  the  custody  of  the  alien  property  cus- 
todian, or  in  the  Treasury  of  the  United  States,  as  provided  in  this 
Act,  and  until  any  final  judgment  or  decree  which  shall  be  entered 
in  favor  of  the  claimant  shall  be  fully  satisfied  by  payment  or  con- 
veyance, transfer,  assignment,  or  delivery  by  the  defendant  or  the 
alien  property  custodian  or  Treasurer  of  the  United  States  or  order 
of  the  court,  or  until  final  judgment  or  decree  shall  be  entered 
against  the  claimant,  or  suit  otherwise  terminated. 

"Except  as  herein  provided,  the  money  or  other  property 
conveyed,  transferred,  assigned,  delivered,  or  paid  to  the  alien 
property  custodian  shall  not  be  liable  to  lien,  attachment,  garnish- 
ment, trustee  process,  or  execution,  or  subject  to  any  order  or 
decree  of  any  court. 

"This  section  shall  not  apply,  however,  to  money  paid  to 
the  alien  property  custodian  under  section  ten  hereof." 

SECTION  9  AS  AMENDED  JULY  11,  1919. 

"That  any  person  not  an  enemy  or  ally  of  enemy  claiming  any 
interest,  right,  or  title  in  any  money  or  other  property  which 
may  have  been  conveyed,  transferred,  assigned,  delivered,  or 
paid  to  the  Alien  Property  Custodian  hereunder  and  held  by 
him  or  by  the  Treasurer  of  the  United  States,  or  to  whom  any 
debt  may  be  owing  from  an  enemy  or  ally  of  enemy  whose  prop- 
erty or  any  part  thereof  shall  have  been  conveyed,  transferred, 
assigned,  delivered,  or  paid  to  the  Alien  Property  Custodian 
hereunder,  and  held  by  him  or  by  the  Treasurer  of  the  United 
States,  may  file  with  the  said  custodian  a  notice  of  his 
claim  under  oath  and  in  such  form  and  containing  such  par- 
ticulars as  the  said  custodian  shall  require;  and  the  President, 
if  application  is  made  therefor  by  the  claimant,  may  order 
the  payment,  conveyance,  transfer,  assignment,  or  delivery 
to  said  claimant  of  the  money  or  other  property  so  held  by 
the  Alien  Property  Custodian  or  by  the  Treasurer  of  the  United 
States  or  of  the  interest  therein  to  which  the  President 
shall  determine  said  claimant  is  entitled :  Provided,  That  no 
such  order  by  the  President  shall  bar  any  person  from  the  prose- 
cution of  any  suit  at  law  or  in  equity  against  the  claimant  to 
establish  any  right,  title  or  interest  which  he  may  have  in  such 


35 

money  or  other  property.  If  the  President  shall  not  so  order 
within  sixty  days  after  the  filing  of  such  application  or  if  the 
claimant  shall  have  filed  the  notice  as  above  required  and  shall 
have  made  no  application  to  the  President,  said  claimant  may, 
at  any  time  before  the  expiration  of  six  months  after  the  end  of 
the  war  institute  a  suit  in  equity  in  the  Supreme  Court  of  the 
District  of  Columbia  or  in  the  district  court  of  the  United  States 
for  the  district  in  which  such  claimant  resides,  or,  if  a  corpora- 
tion, where  it  has  its  principal  place  of  business  (to  which  suit 
the  Alien  Property  Custodian  or  the  Treasurer  of  the  United 
States,  as  the  case  may  be,  shall  be  made  a  party  defendant), 
to  establish  the  interest,  right,  title,  or  debt  so  claimed,  and  if 
suit  shall  be  so  instituted  when  the  money  or  other  property  of 
the  enemy,  or  ally  of  enemy,  against  whom  such  interest,  right, 
or  title  is  asserted,  or  debt  claimed,  shall  be  retained  in  the  cus- 
tody of  the  Alien  Property  Custodian,  or  in  the  Treasury  of  the 
United  States,  as  provided  in  this  Act,  and  until  any  final  judg- 
ment or  decree  which  shall  be  entered  in  favor  of  the  claimant 
shall  be  fully  satisfied  by  payment  or  conveyance,  transfer,  as- 
signment, or  delivery  by  the  defendant  or  by  the  Alien  Property 
Custodian  or  Treasurer  of  the  United  States  on  order  of  the  court, 
or  until  final  judgment  or  decree  shall  be  entered  against  the 
claimant,  or  suit  otherwise  terminated:  Provided,  however,  That 
in  respect  of  all  property  heretofore  determined  by  the  President 
to  have  been  held  for,  by,  on  account  of,  or  on  behalf  of,  or  for 
the  benefit  of  a  person  who  was  an  enemy  or  ally  of  enemy,  if 
the  President,  after  further  investigation,  shall  determine  that 
such  person  was  an  enemy  or  an  ally  of  enemy  solely  by  reason 
of  residence  in  that  portion  of  the  territory  of  any  nation  asso- 
ciated with  the  United  States  in  the  prosecution  of  the  war 
which  was  occupied  by  the  military  or  naval  forces  of  Germany 
or  Austria-Hungary,  or  their  allies,  and  that  such  person  is  a 
citizen  or  subject  of  such  associated  nation,  then  the  President, 
without  any  application  being  made  therefor  may  order  the  pay- 
ment, conveyance,  transfer,  assignment,  or  delivery  of  such  money 
or  other  property  held  by  the  Alien  Property  Custodian,  or  by  the 
Treasurer  of  the  United  States,  or  of  the  interest  therein  to 
which  the  President  shall  determine  such  person  entitled,  either 
to  the  said  enemy  or  to  the  person  by  whom  said  property  was 
conveyed,  transferred,  assigned,  delivered  or  paid  over  to  the 
Alien  Property  Custodian.  And  the  receipt  of  the  said  enemy 
or  of  the  person  by  whom  said  property  was  conveyed,  trans- 
ferred, assigned  or  delivered  to  the  Alien  Property  Custodian, 
shall  be  a  full  acquittance  and  discharge  of  the  Alien  Property 
Custodian  or  the  Treasurer  of  the  United  States  as  the  case 
may  be,  and  of  the  United  States  in  respect  of  all  claims  of 
all  persons  heretofore  or  hereafter  claiming  any  right,  title, 
or  interest  in  said  property,  or  compensation  or  damages 
arising  from  the  capture  of  such  property  by  the  President 
or  the  Alien  Property  Custodian:  Provided  further,  however, 
That  except  as  herein  provided  no  such  action  by  the  President 
shall  bar  any  person  from  the  prosecution  of  any  suit  at  law  or 
in  equity  to  establish  any  right,  title  or  interest  which  he  may 
have  therein. 

"Except  as  herein  provided,  the  money  or  other  property 
conveyed,  transferred,  assigned,  delivered,  or  paid  to  the  Alien 


36 

Property  Custodian  shall  not  be  liable  to  lien,  attachment,  gar- 
nishment, trustee  process,  or  execution,  or  subject  to  any  order  or 
decree  of  any  court. 

"This  section  shall  not  apply,  however,  to  money  paid  to 
the  Alien  Property  Custodian  under  Section  10  hereof." 

SECTION  9  AS  AMENDED  JUNE  5,  1920. 

".  .  .  Sec.  9  (a)  That  any  person  not  an  enemy  or  ally 
of  enemy  claiming  any  interest,  right,  or  title  in  any  money  or 
other  property  which  may  have  been  conveyed,  transferred,  as- 
signed, delivered,  or  paid  to  the  Alien  Property  Custodian  or 
seized  by  him  hereunder  and  held  by  him  or  by  the  Treasurer 
of  the  United  States,  or  to  whom  any  debt  may  be  owing  from  an 
enemy  or  ally  of  enemy  whose  property  or  any  part  thereof  shall 
have  been  conveyed,  transferred,  assigned,  delivered,  or  paid  to 
the  Alien  Property  Custodian  or  seized  by  him  hereunder  and 
held  by  htm  or  by  the  Treasurer  of  the  United  States  may  file 
with  the  said  custodian  a  notice  of  his  claim  under  oath  and  in 
such  form  and  containing  such  particulars  as  the  said  custodian 
shall  require;  and  the  President,  if  application  is  made  therefor 
by  the  claimant,  may  order  the  payment,  conveyance,  transfer, 
assignment,  or  delivery  to  said  claimant  of  the  money  or  other 
property  so  held  by  the  Alien  Property  Custodian  or  by  the 
Treasurer  of  the  United  States,  or  of  the  interest  therein  to 
which  the  President  shall  determine  said  claimant  is  entitled: 
Provided,  That  no  such  order  by  the  President  shall  bar  any 
person  from  the  prosecution  of  any  suit  at  law  or  in  equity  against 
the  claimant  to  establish  any  right,  title,  or  interest  which  he 
may  have  in  such  money  or  other  property.  If  the  President 
shall  not  so  order  within  sixty  days  after  the  filing  of  such  appli- 
cation or  if  the  claimant  shall  have  filed  the  notice  as  above 
required  and  shall  have  made  no  application  to  the  President, 
said  claimant  may,  at  any  time  before  the  expiration  of  six 
months  after  the  end  of  the  war  institute  a  suit  in  equity  in  the 
Supreme  Court  of  the  District  of  Columbia  or  in  the  district  court 
of  the  United  States  for  the  district  in  which  such  claimant  re- 
sides, or,  if  a  corporation,  where  it  has  its  principal  place  of 
business  (to  which  suit  the  Alien  Property  Custodian  or  the 
Treasurer  of  the  United  States,  as  the  case  may  be,  shall  be  made 
a  party  defendant),  to  establish  the  interest,  right,  title,  or  debt 
so  claimed,  and  if  so  established  the  court  shall  order  the  pay- 
ment, conveyance,  transfer,  assignment,  or  delivery  to  said  claim- 
ant of  the  money  or  other  property  so  held  by  the  Alien  Property 
Custodian  or  by  the  Treasurer  of  the  United  States  or  the  interest 
therein  to  whidh  the  court  shall  determine  said  claimant  is 
entitled.  If  suit  shall  be  so  instituted,  then  such  money  or  prop- 
erty shall  be  retained  in  the  custody  of  the  Alien  Property  Cus- 
todian, or  in  the  Treasury  of  the  United  States,  as  provided  by 
this  Act,  and  until  any  final  judgment  or  decree  which  shall  be 
entered  in  favor  of  the  claimant  shall  be  fully  satisfied  by  pay- 
ment or  conveyance,  transfer,  assignment,  or  delivery  by  the 
defendant,  or  by  the  Alien  Property  Custodian,  or  Treasurer  of 
the  United  States  on  order  of  the  court,  or  until  final  judgment 
or  decree  shall  be  entered  against  the  claimant  or  suit  otherwise 
terminated. 


37 

"(b)  In  respect  of  all  money  or  other  property  conveyed, 
transferred,  assigned,  delivered,  or  paid  to  the  Alien  Property 
Custodian  or  seized  by  him  hereunder  and  held  by  him  or  by 
the  Treasurer  of  the  United  States,  if  the  President  shall  deter- 
mine that  the  owner  thereof  at  the  time  such  money  or  other 
property  was  required  to  be  so  conveyed,  transferred,  assigned, 
delivered,  or  paid  to  the  Alien  Property  Custodian  or  at  the  time 
when  it  was  voluntarily  delivered  to  him  or  was  seized  by  him 
was: 

"(1)  A  citizen  or  subject  of  any  nation  or  State  or  free  city 
other  than  Germany  or  Austria  or  Hungary  or  Austria-Hungary, 
and  is  at  the  time  of  the  return  of  such  money  or  other  property 
hereunder  a  citizen  or  subject  of  any  such  nation  or  State  or 
free  city;  or 

"(2)  A  woman  who  at  the  time  of  her  marriage  was  a  subject 
or  citizen  of  a  nation  which  has  remained  neutral  in  the  war,  or 
of  a  nation  which  was  associated  with  the  United  States  in  the 
prosecution  of  said  war,  and  who  prior  to  April  6,  1917,  intermar- 
ried with  a  subject  or  citizen  of  Germany  or  Austria-Hungary  and 
that  the  money  or  other  property  concerned  was  not  acquired  by 
such  woman  either  directly  or  indirectly  from  any  subject  or 
citizen  of  Germany  or  Austria-Hungary ;  or 

"(3)  A  woman  who  at  the  time  of  her  marriage  was  a  citizen 
of  the  United  States  (said  citizenship  having  been  acquired  by 
birth  in  the  United  States) ,  and  who  prior  to  April  6,  1917,  inter- 
married with  a  subject  or  citizen  of  Germany  or  Austria-Hungary, 
and  that  the  money  or  other  property  concerned  was  not  acquired 
by  such  woman  either  directly  or  indirectly  from  any  subject  or 
citizen  of  Germany  or  Austria-Hungary ;  or 

"(4)  A  citizen  or  subject  of  Germany  or  Austria  or  Hungary 
or  Austria-Hungary  and  was,  at  the  time  of  the  severance  of  diplo- 
matic relations  between  the  United  States  and  such  nations  re- 
pectively,  accredited  to  the  United  States  as  a  diplomat  or  consular 
officer  of  any  such  nation,  or  the  wife  or  minor  child  of  such  officer, 
and  that  the  money  or  other  property  concerned  was  within  the 
territory  of  the  United  States  by  reason  of  the  service  of  such 
officer  in  such  capacity;  or 

"(5)  A  citizen  or  subject  of  Germany  or  Austria-Hungary, 
who  by  virtue  of  the  provisions  of  sections  4067,  4068,  4069  and 
4070  of  the  Revised  Statutes,  and  of  the  proclamations  and  regula- 
tions thereunder,  was  transferred,  after  arrest,  into  the  custody 
of  the  War  Department  of  the  United  States  for  detention  during 
the  war  and  is  at  the  time  of  the  return  of  his  money  or  other 
property  hereunder  living  within  the  United  States;  or 

"  (6)  A  partnership,  association,  or  other  unincorporated  body 
of  individuals  outside  the  United  States,  or  a  corporation  incorpo- 
rated within  any  country  other  than  the  United  States,  and  was 
entirely  owned  at  such  time  by  subjects  or  citizens  of  nations, 
States,  or  free  cities  other  than  Germany  or  Austria  or  Hungary 
or  Austria-Hungary  and  is  so  owned  at  the  time  of  the  return 
of  its  money  or  other  property  hereunder ;  or 

"(7)  The  Government  of  Bulgaria  or  Turkey,  or  any  political 
or  municipal  subdivision  thereof;  or 

"(8)  The  Government  of  Germany  or  Austria  or  Hungary  or 
Austria-Hungary,  and  that  the  money  or  other  property  concerned 
was  the  diplomatic  or  consular  property  of  such  Government — 


44706 


38 

then  the  President,  without  any  application  being  made  therefor, 
may  order  the  payment,  conveyance,  transfer,  assignment,  or 
delivery  of  such  money  or  other  property  held  by  the  Alien  Prop- 
erty Custodian  or  by  the  Treasurer  of  the  United  States,  or  of  the 
interest  therein  to  which  the  President  shall  determine  such  person 
entitled,  either  to  the  said  owner  or  to  the  person  by  whom  said 
was  conveyed,  transferred,  assigned,  delivered,  or  paid  over  to  the 
Alien  Property  Custodian:  Provided,  That  no  person  shall  be 
deemed  or  held  to  be  a  citizen  or  subject  of  Germany  or  Austria 
or  Hungary  or  Austria-Hungary  for  the  purposes  of  this  section, 
even  though  he  was  such  citizen  or  subject  at  the  time  first  speci- 
fied in  this  sub-section,  if  he  has  become  or  shall  become,  ipso 
facto  or  through  exercise  of  option,  a  citizen  or  subject  of  any 
nation  or  State  or  free  city  other  than  Germany,  Austria,  or  Hun- 
gary, (first)  under  the  terms  of  such  treaties  of  peace  as  have 
been  or  may  be  concluded  subsequent  to  November  11,  1918,  be- 
tween Germany  or  Austria  or  Hungary  (of  the  one  part)  and  the 
United  States  and/or  three  or  more  of  the  following-named  powers : 
The  British  Empire,  France,  Italy,  and  Japan  (of  the  other  part) , 
or  (second)  under  the  terms  of  such  treaties  as  have  been  or  may 
be  concluded  in  pursuance  of  the  treaties  of  peace  aforesaid  be- 
tween any  nation,  State,  or  free  city  (of  the  one  part)  whose 
territories,  in  whole  or  in  part,  on  August  4,  1914,  formed  a  por- 
tion of  the  Territory  of  Germany  or  Austria-Hungary  and  the 
United  States  and/or  three  or  more  of  the  following-named 
powers:  The  British  Empire,  France,  Italy,  and  Japan  (of  the 
other  part) .  For  the  purposes  of  this  section  any  citizen  or  subject 
of  a  State  or  free  city  which  at  the  time  of  the  proposed  return 
of  money  or  other  property  of  such  citizen  or  subject  hereunder 
forms  a  part  of  the  territory  of  any  one  of  the  following  nations : 
Germany,  Austria,  or  Hungary,  shall  be  deemed  to  be  a  citizen  or 
subject  of  such  nation.  And  the  receipt  of  the  said  owner  or  of 
the  person  by  whom  said  property  was  conveyed,  transferred, 
assigned,  delivered,  or  paid  over  to  the  Alien  Property  Custodian 
shall  be  a  full  acquittance  and  discharge  of  the  Alien  Property 
Custodian  or  the  Treasurer  of  the  United  States,  as  the  case  may 
be,  and  of  the  United  States  in  respect  to  all  claims  of  all  persons 
heretofore  or  hereafter  claiming  any  right,  title,  or  interest  in 
said  property,  or  compensation  or  damages  arising  from  the  cap- 
ture of  such  property  by  the  President  or  the  Alien  Property  Cus- 
todian: Provided  further,  however,  That  except  as  herein  pro- 
vided no  such  action  by  the  President  shall  bar  any  person  from 
the  prosecution  of  any  suit  at  law  or  in  equity  to  establish  any 
right,  title,  or  interest  which  he  may  have  therein. 

"  (c)  Any  person  whose  property  the  President  is  authorized 
to  return  under  the  provisions  of  sub-section  (b)  hereof  may  file 
notice  of  claim  for  the  return  of  such  property,  as  provided  in 
sub-section  (a)  hereof,  and  thereafter  may  make  application  to 
the  President  for  allowance  of  such  claim  and/or  may  institute 
suit  in  equity  to  recover  such  property,  as  provided  in  said  sub- 
section, and  with  like  effect.  The  President  or  the  court,  as  the 
case  may  be,  may  make  the  same  determinations  with  respect  to 
citizenship  and  other  relevant  facts  that  the  President  is  authorized 
to  make  under  the  provisions  of  subsection  (b)  hereof. 

"  (d)  Whenever  a  person,  deceased,  would  have  been  entitled, 
if  living,  to  the  return  of  his  money  or  other  property  hereunder, 


39 

then  his  legal  representative  may  proceed  for  the  return  of  such 
property  as  provided  in  subsection  (a)  hereof:  Provided,  however, 
That  the  President  or  the  court,  as  the  case  may  be,  before  grant- 
ing such  relief  shall  impose  such  conditions  by  way  of  security  or 
otherwise,  as  the  President  or  the  court,  respectively,  shall  deem 
sufficient  to  insure  that  such  legal  representative  will  re-deliver 
to  the  Alien  Property  Custodian  such  portion  of  the  money  or  other 
property  so  received  by  him  as  shall  be  distributable  to  any  person 
not.  eligible  as  a  claimant  under  subsections  (a)  or  (c)  hereof. 

"(e)  No  money  or  other  property  shall  be  returned  nor  any 
debt  allowed  under  this  section  to  any  person  who  is  a  citizen  or 
subject  of  any  nation  which  was  associated  with  the  United  States 
in  the  prosecution  of  the  war,  unless  such  nation  in  like  case  ex- 
tends reciprocal  rights  to  citizens  of  the  United  States ;  nor  in  any 
event  shall  a  debt  be  allowed  under  this  section  unless  it  was 
owing  to  and  owned  by  the  claimant  prior  to  October  6,  1917,  and 
as  to  claimants  other  than  citizens  of  the  United  States  unless  it 
arose  with  reference  to  the  money  or  other  property  held  by  the 
Alien  Property  Custodian  or  Treasurer  of  the  United  States  here- 
under.  • 

"(f)  Except  as  herein  provided,  the  money  or  other  prop- 
erty conveyed,  transferred,  assigned,  delivered,  or  paid  to  the  Alien 
Property  Custodian,  shall  not  be  liable  to  lien,  attachment,  garnish- 
ment, trustee  process,  or  execution,  or  subject  to  any  order  or 
decree  of  any  court. 

"(g)  This  section  shall  not  apply,  however,  to  money  paid 
to  the  Alien  Property  Custodian  under  section  10  hereof." 

SECTION  9  AS  AMENDED  FEBRUARY  27,  1921. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  subdivisions  (2)  and  (3)  of 
subsection  (b)  of  section  9  of  an  Act  entitled  "An  Act  to  define,  regulate, 
and  punish  trading  with  the  enemy,  and  for  other  purposes,"  approved 
October  6,  1917,  as  amended,  be,  and  hereby  are,  amended  so  as  to  read 
as  follows : 

"(2)  A  woman  who,  at  the  time  of  her  marriage,  was  a  sub- 
ject or  citizen  of  a  nation  which  has  remained  neutral  in  the  war, 
or  of  a  nation  which  was  associated  with  the  United  States  in  the 
prosecution  of  said  war,  and  who,  prior  to  April  6,  1917,  inter- 
married with  a  subject  or  citizen  of  Germany  or  Austria-Hungary 
and  that  the  money  or  other  property  concerned  was  not  acquired 
by  such  woman,  either  directly  or  indirectly,  from  any  subject  or 
citizen  of  German  or  Austria-Hungary  subsequent  to  January 
1, 1917. 

"  (3)  A  woman  who,  at  the  time  of  her  marriage,  was  a  citizen 
of  the  United  States  and  who,  prior  to  April  6,  1917,  intermarried 
with  a  subject  or  citizen  of  Germany  or  Austria-Hungary,  and  that 
the  money  or  other  property  concerned  was  not  acquired  by  such 
woman,  either  directly  or  indirectly,  from  any  subject  or  citizen 
of  Germany  or  Austria-Hungary  subsequent  to  January  1,  1917." 

SECTION  9  AS  AMENDED  DECEMBER  21,  1921. 

"Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  section 


40 

9  of  the  Act  entitled  'An  Act  to  define,  regulate  and  punish  trading 
with  the  enemy,  and  for  other  purposes,'  approved  October  6, 
1917,  as  amended,  is  hereby  amended  by  striking  out  the  words 
'six  months'  in  such  section  and  inserting  in  lieu  thereof  'eighteen 
months.'  " 

SECTION  10. 

Sec.  10.  That  nothing  contained  in  this  Act  shall  be  held  to  make  un- 
lawful any  of  the  following  Acts : 

(a)  An  enemy,  or  ally  of  enemy,  may  file  and  prosecute  in  the  United 
States  an  application  for  letters  patent,  or  for  registration  of  trade-mark, 
print,  label,  or  copyright,  and  may  pay  any  fees  therefor  in  accordance  with 
and  as  required  by  the  provisions  of  existing  law  and  fees  for  attorneys  or 
agents  for  filing  and  prosecuting  such  applications.  Any  such  enemy,  or  ally 
of  enemy,  who  is  unable  during  war,  or  within  six  months  threafter,  on 
account  of  conditions  arising  out  of  war,  to  file  any  such  application,  or 
to  pay  any  official  fee,  or  to  take  any  action  required  by  law  within  the 
period  prescribed  by  law,  may  be  granted  an  extension  of  nine  months 
beyond  the  expiration  of  said  period,  provided  the  nation  of  which  the  said 
applicant  is  a  citizen,  subject,  or  corporation  shall  extend  substantially 
similar  privileges  to  citizens  and  corporations  of  the  United  States. 

(b)  Any  citizen  of  the  United  States,  or  any  corporation  organized 
within  the  United  States,  may,  when  duly  authorized  by  the  President, 
pay  to  an  enemy  or  ally  of  enemy  any  tax,  annuity  or  fee  which  may  be 
required  by  the  laws  of  such  enemy  or  ally  of  enemy  nation  in  relation  to 
patents  and  trade-marks,  prints,  labels,  and  copyrights ;  and  any  such  citizen 
or  corporation  may  file  and  prosecute  an  application  for  letters  patent  or 
for  registration  of  trade-mark,  print,  label,  or  copyright  in  the  country  of 
an  enemy,  or  of  an  ally  of  enemy  after  first  submitting  such  application  to 
the  President  and  receiving  license  to  file  and  prosecute,  and  to  pay  the  fees 
required  by  law  and  customary  Agents'  fees,  the  maximum  amount  of  which 
in  each  case  shall  be  subject  to  the  control  of  the  President. 

(c)  Any  citizen  of  the  United  States  or  any  corporation  organized 
within  the  United  States  desiring  to  manufacture,  or  cause  to  be  manufac- 
tured, a  machine,  manufacture,  composition  of  matter,  or  design,  or  to  carry 
on,  or  to  use  any  trade-mark,  print,  label,  or  cause  to  be  carried  on,  a 
process  under  any  patent  or  copyrighted  matter  owned  or  controlled  by  an 
enemy  or  ally  of  enemy  at  any  time  during  the  existence  of  a  state  of  war 
may  apply  to  the  President  for  a  license;  and  the  President  is  hereby 
authorized  to  grant  such  a  license,  non-exclusive  or  exclusive  as  he  shall 
deem  best,  provided  he  shall  be  of  the  opinion  that  such  grant  is  for  the 
public  welfare,  and  that  the  applicant  is  able  and  intends  in  good  faith  to 
manufacture,  or  cause  to  be  manufactured,  the  machine,  manufacture,  com- 
position of  matter,  or  design  or  to  carry  on,  or  to  cause  to  be  carried  on, 
the  process  or  to  use  the  trade-mark,  print,  label  or  copyrighted  matter. 
The  President  may  prescribe  the  conditions  of  this  license,  including  the 
fixing  of  prices  of  articles  and  products  necessary  to  the  health  of  the 
military  and  naval  forces  of  the  United  States  or  the  successful  prosecution 


41 

of  the  war,  and  the  rules  and  regulations  under  which  such  license  may  be 
granted  and  the  fee  which  shall  be  charged  therefor,  not  exceeding  $100, 
and  not  exceeding  one  per  centum  of  the  fund  deposited  as  hereinafter 
provided.  Such  license  shall  be  aw  complete  defense  to  any  suit  at  law  or  in 
equity  instituted  by  the  enemy  or  ally  of  enemy  owners  of  the  letters  patent, 
trade-mark,  print,  label,  or  copyright,  or  otherwise,  against  the  licensee 
for  infringement  or  for  damages,  royalty,  or  other  money  award  on  account 
of  anything  done  by  the  licensee  under  such  license,  except  as  provided  in 
subsection  (f)  hereof. 

(d)  The  licensee  shall  file  with  the  President  a  full  statement  of  the 
extent  of  the  use  and  enjoyment  of  the  license,  and  of  the  prices  received  in 
such  form  and  at  such  stated  periods  (at  least  annually)  as  the  President 
may  prescribe ;  and  the  licensee  shall  pay  at  such  times  as  may  be  required 
to  the  alien  property  custodian  not  to  exceed  five  per  centum  of  the  gross 
sums  received  by  the  licensee  from  the  sale  of  said  inventions  or  use  of 
the  trade-mark,  print,  label  or  copyrighted  matter,  or,  if  the  President 
shall  so  order,  five  per  centum  of  the  value  of  the  use  of  such  inventions, 
trade-marks,  prints,  labels,  or  copyrighted  matter  to  the  licensee  as  estab- 
lished by  the  President ;  and  sums  so  paid  shall  be  deposited  by  said  Alien 
Property  Custodian  forthwith  in  the  Treasury  of  the  United  States  as  a 
trust  fund  for  the  said  licensee  and  for  the  owner  of  the  said  patent,  trade- 
mark, print,  label  or  copyright  registration  as  hereinafter  provided,  to  be 
paid  from  the  Treasury  upon  order  of  the  court,  as  provided  in  subdivision 
(f)  of  this  section,  or  upon  the  direction  of  the  Alien  Property  Custodian. 

(e)  Unless  surrendered  or  terminated  as  provided  in  this  Act,  any 
license  granted  hereunder  shall  continue  during  the  term  fixed  in  the  license 
or  in  the  absence  of  any  such  limitation  during  the  term  of  the  patent, 
trade-mark,  print,  label,   or  copyrighted  registration  under  which  it  is 
granted.     Upon  violation  by  the  licensee  of  any  of  the  provisions  of  this 
Act,  or  of  the  conditions  of  the  license,  the  President  may,  after  due  notice 
and  hearing,  cancel  any  license  granted  by  him. 

(f)  The  owner  of  any  patent,  trade-mark,  print,  label,  or  copyright 
under  which  a  license  is  granted  hereunder  may,  after  the  end  of  the  war 
and  until  the  expiration  of  one  year  thereafter,  file  a  bill  in  equity  against 
the  licensee  in  the  district  court  of  the  United  States  for  the  district  in 
which  the  said  licensee  resides,  or,  if  a  corporation,  in  which  it  has  its 
principal  place  of  business   (to  which  suit  the  Treasurer  of  the  United 
States  shall  be  made  a  party),  for  recovery  from  the  said  licensee  for  all 
use  and  enjoyment  of  the  said  patented  invention,  trade-mark,  print,  label, 
or  copyrighted  matter :    Provided,  however,  That  whenever  suit  is  brought, 
as  above,  notice  shall  be  filed  with  the  alien  property  custodian  within  thirty 
days  after  date  of  entry  of  suit;  Provided,  further,  that  the  licensee  may 
make  any  and  all  defenses  which  would  be  available  were  no  license  granted. 
The  court  on  due  proceedings  had    may  adjudge  and  decree  to  the  said 
owner  payment  of  a  reasonable  royalty.    The  amount  of  said  judgment  and 
decree,  when  final,  shall  be  paid  on  order  of  the  court  to  the  owner  of  the 
patent  from  the  fund  deposited  by  the  licensee,  so  far  as  such  deposit  will 


42 

satisfy  said  judgment  and  decree;  and  the  said  payment  shall  be  in  full  or 
partial  satisfaction  of  said  judgment  and  decree,  as  the  facts  may  appear; 
and  if,  after  payment  of  all  such  judgments  and  decrees,  there  shall  remain 
any  balance  of  said  deposit,  such  balance  shall  be  repaid  to  the  licensee  on 
order  of  the  alien  property  custodian.  If  no  suit  is  brought  within  one 
year  after  the  end  of  the  war,  or  no  notice  is  filed  as  above  required,  then 
the  licensee  shall  not  be  liable  to  make  any  further  deposits,  and  all  funds 
deposited  by  him  shall  be  repaid  to  him  on  order  of  the  alien  property 
custodian.  Upon  entry  of  suit  and  notice  filed  as  above  required,  or  upon 
repayment  of  funds  as  above  provided,  the  liability  of  the  licensee  to  make 
further  reports  to  the  President  shall  cease. 

If  suit  is  broug-ht  as  above  provided,  the  court  may,  at  any  time, 
terminate  the  license,  and  may,  in  such  event,  issue  an  injunction  to  restrain 
the  licensee  from  infringement  thereafter,  or  the  court,  in  case  the  licensee, 
prior  to  suit,  shall  have  made  investment  of  capital  based  on  possession  of 
the  license,  may  continue  the  license  for  such  period  and  upon  such  terms 
and  with  such  royalties  as  it  shall  find  to  be  just  and  reasonable. 

(g)  Any  enemy,  or  ally  of  enemy,  may  institute  and  prosecute  suits  in 
equity  against  any  person  other  than  a  licensee  under  this  act  to  enjoin 
infringement  of  letters  patent,  trade-mark,  print,  label  and  copyrights  in 
the  United  States  owned  or  controlled  by  said  enemy  or  ally  of  enemy,  in  the 
same  manner  and  to  the  extent  that  he  would  be  entitled  so  to  do  if  the 
United  States  was  not  at  war:  Provided,  That  no  final  judgment  or  decree 
shall  be  entered  in  favor  of  such  enemy  or  ally  of  enemy  by  any  court  except 
after  thirty  days'  notice  to  the  alien  property  custodian.  Such  notice  shall 
be  in  writing  and  shall  be  served  in  the  same  manner  as  civil  process  of 
Federal  courts. 

(h)  All  powers  of  attorney  heretofore  or  hereafter  granted  by  an 
enemy  or  ally  of  enemy  to  any  person  within  the  United  States,  in  so  far  as 
they  may  be  requisite  to  the  performance  of  acts  authorized  in  subsections 
(a)  and  (g)  of  this  section,  shall  be  valid. 

(i)  Whenever  the  publication  of  an  invention  by  the  granting  of  a 
patent  may,  in  the  opinion  of  the  President,  be  detrimental  to  the  public 
safety  or  defense,  or  may  assist  the  enemy  or  endanger  the  successful 
prosecution  of  the  war,  he  may  order  that  the  invention  be  kept  secret  and 
withhold  the  grant  of  a  patent  until  the  end  of  the  war:  Provided,  That 
the  invention  disclosed  in  the  application  for  said  patent  may  be  held 
abandoned  upon  it  being  established  before  or  by  the  Commissioner  of 
Patents  that,  in  violation  of  said  order,  said  invention  has  been  published 
or  that  an  application  for  a  patent  therefor  has  been  filed  in  any  other 
country,  by  the  inventor  or  his  assigns  or  legal  representatives,  without 
the  consent  or  approval  of  the  commissioner  or  under  a  license  of  the 
President. 

When  an  applicant  whose  patent  is  withheld  as  herein  provided  and 
who  faithfully  obeys  the  order  of  the  President  above  referred  to  shall 
tender  his  invention  to  the  Government  of  the  United  States  for  its  use,  he 


43 

shall,  if  he  ultimately  received  a  patent,  have  the  right  to  sue  for  com- 
pensation in  the  Court  of  Claims,  such  right  to  compensation  to  begin 
from  the  date  of  the  use  of  the  invention  by  the  Government. 

EXCERPTS  FROM  SECTION  12,  as  originally  enacted. 

The  alien  property  custodian  shall  be  vested  with  all  the  powers  of  a 
common-law  trustee  in  respect  of  all  property,  other  than  money,  which 
shall  come  into  his  possession  in  pursuance  of  the  provisions  of  this  Act, 
and,  acting  under  the  supervision  and  direction  of  the  President,  and  under 
such  rules  and  regulations  as  the  President  shall  prescribe,  may  manage 
such  property  and  do  any  act  or  things  in  respect  thereof  or  make  any  dis- 
position thereof  or  of  any  part  thereof,  by  sale  or  otherwise  and  exercise 
any  rights  which  may  be  or  become  appurtenant  thereto  or  to  the  ownership 
thereof,  if  and  when  necessary  to  prevent  waste  and  protect  such  prop- 
erty and  to  the  end  that  interests  of  the  United  States  in  such  property 
and  rights  or  such  person  as  may  ultimately  become  entitled  thereto  or 
to  the  proceeds  thereof,  may  be  preserved  and  safeguarded.  It  shall  be 
the  duty  of  every  corporation  incorporated  within  the  United  States  and 
every  unincorporated  association,  or  company  or  trustee,  or  trustees  within 
the  United  States  issuing  shares  or  certificates  representing  beneficial 
interests  to  transfer  such  shares  or  certificates  upon  its.  his  or  their  books 
into  the  name  of  the  alien  property  custodian  upon  demand,  accompanied 
by  the  presentation  of  the  certificates  which  represent  such  shares  or 
beneficial  interests.  The  alien  property  custodian  shall  forthwith  deposit 
in  the  Treasury  of  the  United  States,  as  hereinbefore  provided,  the  pro- 
ceeds of  any  such  property  or  rights  so  sold  by  him. 

After  the  end  of  the  war  any  claim  or  any  enemy  or  an  ally  of  enemy 
to  any  money  or  other  property  received  and  held  by  the  alien  property 
custodian  or  deposited  in  the  United  States  Treasury,  shall  be  settled  as 
Congress  shall  direct ;  Provided,  However,  That  on  order  of  the  President  as 
set  forth  in  section  nine  hereof,  or  of  the  court,  as  set  forth  in  sections 
nine  and  ten  hereof,  the  alien  property  custodian  or  the  Treasurer  of  the 
United  States,  as  the  case  may  be,  shall  forthwith  convey,  transfer,  assign, 
and  pay  to  the  person  to  whom  the  President  shall  so  order,  or  in  whose 
behalf  the  court  shall  enter  final  judgment  or  decree,  any  property  of  an 
enemy  or  ally  of  enemy,  held  by  said  custodian  or  by  said  Treasurer,  so  far 
as  may  be  necessary  to  comply  with  said  order  of  the  President  or  said 
final  judgment  or  decree  of  the  court:  And  provided  further,  That  the 
Treasurer  of  the  United  States,  on  order  of  the  alien  property  custodian 
shall,  as  provided  in  section  ten  hereof,  repay  to  the  licensee  any  funds 
deposited  by  said  licensee. 

FOURTH  PARAGRAPH  OF  SECTION  12,  as  amended  March  28,  1918. 

The  alien  property  custodian  shall  be  vested  with  all  of  the  powers  of 
a  common-law  trustee  in  respect  of  all  property,  other  than  money,  which 


44 

has  been  or  shall  be,  or  which  has  been  or  shall  be  required  to  be,  conveyed, 
transferred,  assigned,  delivered,  or  paid  over  to  him  in  pursuance  of  the 
provisions  of  this  Act,  and,  in  addition  thereto,  acting  under  the  supervision 
and  direction  of  the  President,  and  under  such  rules  and  regulations  as  the 
President  shall  prescribe,  shall  have  power  to  manage  such  property  and 
do  any  act  or  things  in  respect  thereof  or  make  any  disposition  thereof 
or  of  any  part  thereof,  by  sale  or  otherwise,  and  exercise  any  rights  or 
powers  which  may  be  or  become  appurtenant  thereto  or  to  the  ownership 
thereof  in  like  manner  as  though  he  were  the  absolute  owner  thereof; 
Provided,  That  any  property  sold  under  this  Act,  except  when  sold  to  the 
United  States  shall  be  sold  only  to  American  citizens,  at  public  sale  to  the 
highest  bidder,  after  public  advertisement  of  time  and  place  of  sale  which 
shall  be  where  the  property  or  the  major  portion  thereof  is  situated,  unless 
the  President  stating  the  reasons  therefor,  in  the  public  interest  shall  other- 
wise determine;  Provided  further,  That  when  sold  at  public  sale,  the  alien 
property  custodian  upon  the  order  of  the  President  stating  the  reasons 
therefor,  shall  have  the  right  to  reject  all  bids  and  resell  such  property  at 
public  sale  or  otherwise  as  the  President  may  direct.  Any  person  purchas- 
ing property  from  the  alien  property  custodian  for  an  undisclosed  principal, 
or  for  re-sale  to  a  person  not  a  citizen  of  the  United  States,  or  for  the  benefit 
of  a  person  not  a  citizen  of  the  United  States,  shall  be  guilty  of  a  mis- 
demeanor and,  upon  conviction,  shall  be  subject  to  a  fine  of  not  more  than 
$10,000,  or  imprisonment  for  not  more  than  ten  years,  or  both,  and  the 
property  shall  be  forfeited  to  the  United  States.  It  shall  be  the  duty  of 
every  corporation  incorporated  within  the  United  States  and  every  unin- 
corporated association,  or  company,  or  trustee,  or  trustees,  within  the  Uni- 
ted States  issuing  shares  or  certificates  representing  beneficial  interest  to 
transfer  such  shares  or  certificates  upon  its,  his  or  their  books,  into  the 
name  of  the  alien  property  custodian  upon  demand,  accompanied  by  the 
presentation  of  the  certificates  which  represent  such  shares  or  beneficiary 
interest.  The  alien  property  custodian  shall  forthwith  deposit  in  the 
Treasury  of  the  United  States,  as  hereinbefore  provided,  the  proceeds  of 
any  such  property  or  rights  so  sold  by  him. 


APPENDIX  2. 
EXECUTIVE  ORDERS  AND  EXCERPTS  THEREFROM. 

(a)  EXCERPT  FROM  EXECUTIVE  ORDER  ISSUED  BY  THE  PRESI- 
DENT OF  THE  UNITED  STATES  OCT.  12,  1917,  ENTITLED 
'EXECUTIVE  ORDER  VESTING  POWER  AND  AUTHORITY  IN 
DESIGNATED  OFFICERS  AND  MAKING  RULES  AND  REGULA- 
TIONS UNDER  THE  TRADING  WITH  THE  ENEMY  ACT  AND 
TITLE  VII  OF  THE  ACT  APPROVED  JUNE  15,  1917. 

XXIX.  I  hereby  vest  in  an  alien-property  custodian,  to  be  hereafter 
appointed,  the  executive  administration  of  all  the  provisions  of  section 
7  (a),  section  7  (c),  and  section  7  (d)  of  the  Trading  with  the  Enemy  Act, 


45 

including  all  power  and  authority  to  require  lists  and  reports,  and  to  extend 
the  time  for  filing  the  same,  conferred  upon  the  President  by  the  provi- 
sions of  said  section  7  (a),  and  including  the  power  and  authority  con- 
ferred upon  the  President  by  the  provisions  of  said  section  7  (c) ,  to  require 
the  conveyance,  transfer,  assignment,  delivery  or  payment  to  himself,  at 
such  time  and  in  such  manner  as  he  shall  prescribe,  of  any  money  or  other 
properties  owing  to  or  belonging  to  or  held  for,  by  or  on  account  of,  or 
on  behalf  of,  or  for  the  benefit  of  any  enemy  or  ally  of  an  enemy,  not  hold- 
ing a  license  granted  under  the  provisions  of  the  Trading  with  the  Enemy 
Act,  which,  after  investigation,  said  Alien  Property  Custodian  shall  deter- 
mine is  so  owing  or  so  belongs,  or  is  so  held. 

(b)  EXCERPT  FROM  EXECUTIVE  ORDER  NO.  2813  ISSUED  BY 
THE  PRESIDENT  OF  THE  UNITED  STATES  FEBRUARY  26, 
1918. 

(1)     DEFINITIONS. 

(d)  Any  requirement  made  by  the  Alien  Property  Custodian  pur- 
suant to  Section  7,  subsection  "c"  of  the  "Trading  with  the  Enemy  Act" 
may  be  known  as  and  called  a  demand  and  will  be  hereinafter  referred  to 
as  a  demand. 

(2)     DEMANDS  PURSUANT  TO  SECTION  7,  SUBSECTION  "C." 

(a)  The  Alien  Property  Custodian  may  make  demand  for  the  con- 
veyance, transfer,  assignment,  delivery,  and  payment  of  any  money  or 
other  property  owing  or  belonging  to  or  held  for,  by,  on  account  of,  or 
on  behalf  of  or  for  the  benefit  of  an  enemy  not  holding  a  license  granted 
by  me  or  in  the  exercise  of  my  power  and  authority,  which  the  Alien 
Property  Custodian  after  investigation,  shall  determine  is  so  owing  or 
so  belongs  or  is  so  held,  together  with  every  right,  title,  interest,  and 
estate  of  the  enemy  in  and  to  such  money  or  other  property  and  every 
power  and  authority  of  the  enemy  thereover,  including  (but  without 
limiting  the  generality  of  the  foregoing)  the  power  and  authority  to 
affirm,  ratify,  approve,  revoke,  repudiate  or  disapprove,  in  whole  or 
in  part,  and  at  any  time  or  times,  any  power,  agency,  trust  or  other 
relation  at  the  time  existing,  and  also  any  act  or  omission  thereto- 
fore done  in  the  exercise  of  or  pursuant  to  any  power,  agency,  trust 
or  other  relation  which  the  enemy  could  or  might  lawfully  revoke, 
repudiate,  disaffirm,  affirm,  ratify  or  approve,  *and  also  including 
(but  without  limiting  the  generality  of  the  foregoing)  the  power  and 
authority  to  direct,  supervise,  and  control  the  future  exercise  of  any 
power,  agency,  trust  or  other  relation  over  such  money  or  other  property 
to  the  extent  that  the  enemy  could  or  might  lawfully  direct,  supervise,  and 
control  the  same.  Or  the  Alien  Property  Custodian  may  qualify  or  limit 
any  such  demand  in  such  manner  ±o  such  extent  as  he  may  in  any  case 
see  fit  and  (without  limiting  the  generality  of  the  power  to  qualify  and 
limit  demands)  he  may  in  any  case  demand  all  or  only  such  power  and 
authority  over  the  money  or  other  property  as  he  may  see  fit  without 


46 

demanding  any  conveyance,  transfer,  assignment,  delivery  or  payment 
of  such  money  or  other  property  or  any  other  right,  title,  interest,  or 
estate  therein  or  thereto  except  such  as  may  be  included  within  the  power 
and  authority  demanded  in  the  particular  case  over  such  money  or  other 
property. 

A  demand  for  the  conveyance,  transfer,  assignment,  delivery  and 
payment  of  money  or  other  property  unless  expressly  qualified  or  limited 
shall  be  deemed  to  include  every  right,  title,  interest,  and  estate  of  the 
enemy  in  and  to  the  money  or  other  property  demanded  as  well  as  every 
power  and  authority  of  the  enemy  thereover. 

(b)  Notice  of  demand  made  by  the  Alien  Property  Custodian  may 
be  given  to  any  person  who,  alone  or  jointly  with  others,  may  hold  or 
have  the  custody  or  control  of  or  may  be  exercising  any  right,  power,  or 
authority  in  or  over  or  may  be  performing  any  duty  concerning  the 
money  or  other  property  mentioned  in  the  demand;  and,  in  any  notice 
given,  the  Alien  Property  Custodian  may  require  of  the  person  notified 
the  performance  of  any  act  or  thing  within  the  power  of  the  person  noti- 
fied which  may  be  necessary  or  proper  to  make  the  demand  fully  effective, 
or  to  establish  proper  acknowledgment,  recognition,  or  evidence  of  the 
right,  title,  interest,  and  estate  of  the  Alien  Property  Custodian  in  and 
to  such  money  or  other  property  and  of  the  power  and  authority  of 
the  Alien  Property  Custodian  thereover,  and  it  shall  be  the  duty  of  any 
person  so  notified  to  perform  any  act  or  thing  so  required.     Such  notice 
may  be  given  in  person  or  by  mail. 

(c)  When  demand  shall  be  made  and  notice  thereof  given,  as  here- 
inbefore provided,  such  demand  and  notice  shall  forthwith  vest  in  the 
Alien  Property  Custodian  such  right,  title,  interest,  and  estate  in  and 
to  and  possession  of  the  money  or  other  property  demanded  and  such 
power  or  authority  thereover  as  may  be  included  within  the  demand, 
and  the  Alien  Property  Custodian  may  thereupon  proceed  to  administer 
such  money  and  other  property  in  accordance  with  the  provisions  of  the 
"Trading  with  the  Enemy  Act"  and  with  any  orders,  rules,  or  regulations 
heretofore,  hereby,  or  hereafter  made  by  me  or  heretofore  or  hereafter 
made  by  the  Alien  Property  Custodian. 

(c)     EXCERPT  FROM  EXECUTIVE  ORDER  No.  3061,  ISSUED  BY  THE 
PRESIDENT  OF  THE  UNITED  STATES  DEC.  3,  1918. 

III.  The  power*  and  authority  heretofore  vested  in  the  Federal 
Trade  Commission  to  issue,  pursuant  to  the  provisions  of  sub-section  (c) 
and  section  10  of  the  "Trading  with  the  Enemy  Act,"  or  to  withhold  or 
refuse  a  license  to  any  citizen  of  the  United  States  or  any  corporation, 
organized  within  the  United  States,  to  manufacture  or  cause  to  be  manu- 
factured a  machine,  composition  of  matter  or  design,  or  to  carry  on  or 
cause  to  be  carried  on  a  process  under  any  patent,  or  to  use  any  trade- 
mark, print,  label  or  copyrighted  matter  owned  or  controlled  by  an  enemy 
or  ally  of  enemy,  is  hereby  continued  in  full  force  and  effect,  provided: 

(1)     That  said  Federal  Trade  Commission  shall  not  have  the  power 


47 

or  authority  to  issue  any  such  license  whenever  the  patent,  trademark, 
print,  label  or  copyright  with  respect  to  which  application  for  such  license 
is  made,  shall  have  been  conveyed,  transferred,  assigned  or  delivered  to 
the  Alien  Property  Custodian,  in  pursuance  of  his  requirement,  or  seized 
by  him;  and  whenever  any  patent,  trademark  print,  label  or  copyright 
shall  be  or  shall  have  been  conveyed,  'transferred,  assigned,  or  delivered 
to  the  Alien  Property  Custodian,  in  pursuance  of  his  requirement,  or 
seized  by  him,  the  Federal  Trade  Commission  shall  have  no  further  power 
or  authority  with  respect  thereto. 

(2)  That  said  Federal  Trade  Commission  shall  notify  the  Alien 
Property  Custodian  of  all  applications  made  to  it  for  licenses  under  said 
sub-section  (c)  of  Section  10  of  the  Trading  with  the  Enemy  Act,  so  that 
he  may,  if  he  so  desires  appear  at  any  hearing  and  object  to  the  issuance 
thereof.  The  Alien  Property  Custodian,  in  lieu  of  appearance,  may  file 
with  the  Federal  Trade  Commission  objections  to  the  issuance  of  any  such 
license.  In  no  event  shall  any  license  be  issued  until  after  the  expiration 
of  fifteen  days  after  such  notice  of  the  application  shall  have  been  given 
to  the  Alien  Property  Custodian. 

IV.  The  Alien  Property  Custodian  is  hereby  authorized  to  take  all 
measures  and  do  all  things  that  may  be  necessary  or  expedient  to  admin- 
ister the  powers  and  authority  conferred  by  this  Order. 

V.  I  hereby  vest  in  Frank  L.  Polk  all  power  and  authority  conferred 
upon  the  President  by  the  provisions  of  Section  12  of  said  "Trading  with 
the  Enemy  Act"  as  amended,  other  than  the  Executive  Administration  of 
the  provisions  of  said  Section  12  pertaining  to  the  designation  of  a  Depos- 
itary or  Depositaries,  which  Executive  Order  of  October  29,  1917,  and 
which  Executive  Order  is  expressly  ratified  and  continued  in  full  force 
and  effect;  provided  that  this  order  shall  not  be  construed  to  revoke  or 
cancel  the  power  and  authority  in  the  Attorney  General  by  Paragraph 
XXXII  of  the  Executive  Order  of  October  12,  1917. 

Nothing  in  this  Order  shall  nullify  or  impair  any  license  heretofore 
granted  by  the  Federal  Trade  Commission,  pursuant  to  the  provisions  of 
Section  10  of  An  Act  of  Congress  entitled  "An  Act  to  define,  regulate, 
and  punish  trading  with  the  enemy,  and  for  other  purposes,  approved  Octo- 
ber 6,  1917. 

(d)  ORDER  BY  FRANK  L.  POLK  UNDER  AUTHORITY  OF  EXECU- 
TIVE ORDER  OF  DECEMBER  3,  1918.  AN  ORDER  CONCERN- 
ING THE  SALE,  TRANSFER  AND  RELEASE  OF  CERTAIN 
RIGHTS  UNDER  LETTERS  PATENT,  TRADEMARKS  AND  SIMI- 
LAR RIGHTS  DETERMINED  TO  BELONG  TO  OR  TO  BE  HELD 
FOR,  BY,  ON  ACCOUNT  OF  OR  ON  BEHALF  OF  OR  FOR  THE 
BENEFIT  OF  PERSONS  DETERMINED  TO  BE  ENEMIES  NOT 
HOLDING  A  LICENSE  OR  LICENSES  GRANTED  BY  THE  PRESI- 
DENT WITHIN  THE  PURVIEW  OF  THE  TRADING  WITH  THE 
ENEMY  ACT  AND  THE  AMENDMENTS  THERETO. 
By  virtue  of  the  authority  vested  in  the  President  by  an  Act  of  Con- 
gress entitled  "An  Act  to  define,  regulate  and  punish  trading  with  the 


48 

enemy  and  for  other  purposes,"  approved  October  6,  1917,  known  as  the 
"Trading  with  the  Enemy  Act,"  and  the  amendment  to  such  Act  embodied 
in  "An  Act  making  appropriations  to  supply  urgent  deficiencies  in  the 
appropriations  for  the  fiscal  year  ending  June  30th,  1918,  and  prior  fiscal 
years  on  account  of  War  expenses  and  for  other  purposes,"  approved  March 
28,  1918,  and  the  amendment  to  such  Act  embodied  in  "An  Act  making 
appropriations  to  supply  deficiencies  in  appropriations  for  the  fiscal  year 
ending  June  30,  1919,  and  prior  fiscal  years  on  account  of  War  expenses 
and  for  other  purposes,"  approved  November  4,  1918,  to  make  certain 
orders  such  as  that  herein  contained,  which  authority  has  been  delegated 
to  me  by  the  Executive  Order  No.  3016  and  signed  by  the  President  under 
the  third  day  of  December,  1918,  I  hereby,  in  the  public  interest  make  the 
following  determination  and  order. 

The  Alien  Property  Custodian  may  release  and  discharge  the  United 
States  of  America  and  any  department  thereof  upon  such  terms  and  condi- 
tions as  to  the  Alien  Property  Custodian  may  seem  proper,  from  any  and 
all  claims  and  demands  arising  from  any  alleged  infringement  of  the 
letters  patent,  trademarks  and  rights  under  letters  patent  and  trademarks 
hereinafter  referred  to. 

The  Alien  Property  Custodian  may  sell  at  private  sale  without  public 
or  other  advertisement  to  The  Chemical  Foundation,  Inc.,  a  corporation 
organized  and  existing  under  and  by  virtue  of  the  laws  of  the  State  of 
Delaware  at  such  place  and  upon  such  terms  and  conditions  as  to  the 
Alien  Property  Custodian  or  his  authorized  agent  may  seem  proper,  all 
of  the  letters  patent,  trademarks  and  rights  under  letters  patent  and 
trademarks,  including  all  profits  and  damages  recoverable  at  law  or  in 
equity  for  the  past  infringement  thereof  which  the  Alien  Property  Custo- 
dian may  seize  or  may  have  seized  under  the  provisions  of  the  said  Trading 
with  the  Enemy  Act  and  the  amendments  thereto,  now  or  hereafter  enacted 
and  which  he  from  time  to  time  shall  determine  relate  to  the  objects  and 
purposes  of  said  The  Chemical  Foundation,  Inc.,  as  expressed  and  defined 
by  its  charter. 

My  reasons  in  the  public  interest  for  the  foregoing  determination, 
order,  rule  and  regulation  are: 

First:  Said  letters  patent,  trademarks  and  similar  rights  cannot  be 
sold  to  the  best  advantage  at  public  sale  after  public  or  other  advertisement. 

Second:  The  Chemical  Foundation,  Inc.,  has  been  incorporated  for 
the  purpose  of  holding  letters  patent,  trademarks  and  similar  rights  relat- 
ing to  the  chemical  and  allied  sciences  as  a  trustee  for  American  industry, 
for  the  purpose  of  the  Americanization  of  such  industries  as  may  be 
affected  thereby,  of  eliminating  alien  interests  hostile  to  said  American 
industries  and  of  the  advancement  of  chemical  and  allied  industry  in  the 
United  States.  The  Chemical  Foundation,  Inc.,  is  obligated  to  grant  non- 
exclusive licenses  upon  equal  terms  at  a  uniform  royalty  to  qualified 
American  manufacturers  and  is  empowered  to  grant  free  licenses  to  the 
United  States  for  any  use  the  United  States  may  desire  to  make  of  the 
inventions  covered  by  said  letters  patent,  and  similar  rights. 


49 

Third:  The  public  interest  will  be  best  served  by  a  wide  use  of  the 
inventions  covered  by  said  letters  patent  and  similar  rights  and  such  wide 
use  can  be  most  readily  promoted  by  the  licenses  which  the  said,  The 
Chemical  Foundation,  Inc.,  is  by  its  charter  obligated  to  grant. 

Fourth:  A  private  sale  will  prevent  said  letters  patent,  trade-marks 
and  similar  rights  from  falling  into  the  hands  of  purchasers  who  would 
be  unwilling  or  unable  to  put  the  inventions  covered  thereby  into  use,  or 
would  use  them  for  purely  speculative  purposes. 

Fifth :  It  would  be  impossible  to  make  a  public  sale  of  the  said  letters 
patent,  trade-marks  and  similar  rights  so  as  to  secure  the  foregoing  bene- 
fits to  the  public. 

Sixth:  Unnecessary  expense,  delay  and  inconvenience  may  be 
avoided  by  a  private  sale. 

Done  in  the  District  of  Columbia,  this,  the  26th  day  of  February, 
in  the  year  of  our  Lord  one  thousand  nine  hundred  and 
nineteen,  and  of  the  Independence  of  the  United  States  of 
America,  the  one  hundred  and  forty-third. 

FRANK  L.  POLK. 

(e)  ORDER  BY  FRANK  L.  POLK  UNDER  AUTHORITY  OF  EXECU- 
TIVE ORDER  OF  DECEMBER  3,  1918.  AN  ORDER  CONCERN- 
ING THE  SALE,  TRANSFER  AND  RELEASE  OF  CERTAIN 
COPYRIGHTS,  APPLICATIONS  AND  LETTERS  PATENT  AND 
APPLICATIONS  FOR  THE  REGISTRATION  OF  TRADEMARKS 
AND  COPYRIGHTS  DETERMINED  TO  BELONG  TO  OR  TO  BE 
HELD  FOR,  BY,  ON  ACCOUNT  OF  OR  FOR  THE  BENEFIT  OF 
PERSONS  DETERMINED  TO  BE  ENEMIES  NOT  HOLDING  A 
LICENSE  OR  LICENSES  GRANTED  BY  THE  PRESIDENT 
WITHIN  THE  PURVIEW  OF  THE  TRADING  WITH  THE  ENEMY 
ACT  AND  THE  AMENDMENTS  THERETO. 

By  virtue  of  the  authority  vested  in  the  President  by  an  Act  of  Con- 
gress entitled  "An  Act  to  define,  regulate  and  punish  trading  with  the 
enemy  and  for  other  purposes,"  approved  October  6,  1917,  known  as  the 
"Trading  with  the  Enemy  Act,"  and  the  amendment  to  such  Act  embodied 
in  "An  Act  making  appropriations  to  supply  urgent  deficiencies  in  the 
appropriations  for  the  fiscal  year  ending  June  30th,  1918,  and  prior  fiscal 
years  on  account  of  War  expenses  and  for  other  purposes,"  approved 
March  28.  1918,  and  the  amendment  to  such  Act  embodied  in  "An  Act 
making  appropriations  to  supply  deficiencies  in  appropriations  for  the 
fiscal  year  ending  June  30,  1919,  and  prior  fiscal  years  on  account  of  War 
expenses  and  for  other  purposes,"  approved  November  4,  1918,  to  make 
certain  orders  such  as  that  herein  contained,  which  authority  has  been 
delegated  to  me  by  the  Executive  Order  No.  3016,  and  signed  by  the 
President  under  the  third  day  of  December,  1918,  I  hereby,  in  the  public 
interest,  make  the  following  determination  and  order: 

The  Alien  Property  Custodian  may  release  and  discharge  the  United 
States  of  America  and  any  department  thereof  upon  such  terms  and  con- 


50 

ditions  as  to  the  Alien  Property  Custodian  may  seem  proper,  from  any 
and  all  claims  and  demands  arising  from  any  alleged  infringement  of  the 
copyrights  hereinafter  referred  to. 

The  Alien  Property  Custodian  may  sell  at  private  sale  without  public 
or  other  advertisement  to  The  Chemical  Foundation,  Inc.,  a  corporation 
organized  and  existing  under  and  by  virtue  of  the  laws  of  the  State  of 
Delaware  at  such  place  and  upon  such  terms  and  conditions  as  to  the  Alien 
Property  Custodian  or  his  authorized  agent  may  seem  proper,  all  of  the 
copyrights,  the  certificates  of  registration  thereof  and  the  publications 
upon  which  said  registrations  were  granted,  applications  for  letters  patent 
and  for  the  registration  of  trade-marks  and  copyrights  and  all  rights 
thereunder  which  the  Alien  Property  Custodian  may  seize  or  have  seized 
under  the  provisions  of  the  said  "Trading  with  the  Enemy  Act"  and  the 
amendment  thereto  now  or  hereafter  enacted  and  which  he  from  time 
to  time  shall  determine  relate  to  the  objects  and  purposes  of  said,  The 
Chemical  Foundation,  Inc.,  as  expressed  and  defined  by  its  charter. 

My  reasons  in  the  public  interest  for  the  foregoing  determination, 
order,  rule  and  regulation  are: 

First :  A  similar  order,  rule  and  regulation  relating  to  letters  patent, 
trade-marks  and  similar  rights  has  been  made  by  me  the  twenty-sixth 
day  of  February,  1919,  and  this  order  is  supplemental  thereto  and  neces- 
sary to  fully  carry  out  the  objects  and  purposes  of  said  order  of  February 
twenty-sixth,  1919. 

Second:  Said  copyrights,  applications  for  letters  patent  and  for  the 
registration  of  trade-marks  and  copyrights  can  not  be  sold  to  the  best 
advantage  at  public  sale  after  public  or  other  advertisement. 

Third:  The  Chemical  Foundation,  Inc.,  has  been  incorporated  for 
the  purpose  of  holding  letters  patent,  trade-marks  and  similar  rights 
relating  to  the  chemical  and  allied  sciences  as  a  trustee  for  American 
industry,  for  the  purpose  of  the  Americanization  of  such  industries  as 
may  be  affected  thereby,  by  eliminating  alien  interests  hostile  to  said 
American  industries  and  of  the  advancement  of  chemical  and  allied  indus- 
tries in  the  United  States. 

Fourth:  The  public  interest  will  be  best  served  by  the  administra- 
tion by  The  Chemical  Foundation,  Inc.,  of  the  letters  patent,  trade-marks, 
copyrights,  and  applications  therefor  and  similar  rights  permitted  to 
be  sold  to  it  by  this  order  and  by  my  order  of  the  twenty-sixth  of  Febru- 
ary, 1919. 

Fifth:  A  private  sale  will  prevent  said  copyrights,  applications  for 
letters  patent  and  for  the  registration  of  trade-marks  and  copyrights 
from  falling  into  the  hands  of  purchasers  who  would  be  unwilling  or 
unable  to  carry  out  the  purposes  of  The  Chemical  Foundation,  Inc.,  or 
would  use  the  copyrights,  applications  for  letters  patent  and  for  the 
registration  of  trade-marks  and  copyrights  for  purely  speculative  pur- 
poses. 

Sixth:  It  would  be  impossible  to  make  a  public  sale  of  the  said 
copyrights,  letters  patent  and  applications  for  the  registration  of  trade- 


51 

marks  and  copyrights  so  as  to  secure  the  benefits  to  the  public  which  a 
sale  to  The  Chemical  Foundation,  Inc.,  would  secure  to  the  public. 

Seventh:  Unnecessary  expense,  delay  and  inconvenience  may  be 
avoided  by  a  private  sale. 

Done  in  the  District  of  Columbia,  this  5th  day  of  April,  in  the 
year  of  our  Lord  One  thousand  nine  hundred  and  nineteen, 
and  of  the  Independence  of  the  United  States  of  America, 
the  one  hundred  and  forty-third. 

FRANK  L.  POLK. 

(f)  EXECUTIVE  ORDER— AN  ORDER  CONCERNING  THE  SALE 
AND  CONVEYANCE  OF  CERTAIN  CHOSES  IN  ACTION  AND 
RIGHTS,  INTERESTS  AND  BENEFITS  UNDER  CERTAIN 
AGREEMENTS,  DETERMINED  TO  BELONG  TO,  OR  TO  BE 
HELD  FOR,  BY,  ON  ACCOUNT  OF,  OR  ON  BEHALF  OF,  OR 
FOR  THE  BENEFIT  OF  PERSONS  DETERMINED  TO  BE  ENE- 
MIES, NOT  HOLDING  A  LICENSE  OR  LICENSES  GRANTED  BY 
THE  PRESIDENT  WITHIN  THE  PURVIEW  OF  THE  "TRADING 
WITH  THE  ENEMY  ACT"  AND  THE  AMENDMENTS  THERETO. 

By  virtue  of  the  authority  vested  in  me  by  an  Act  of  Congress  entitled 
"An  Act  to  define,  regulate,  and  punish  trading  with  the  enemy  and  for 
other  purposes,"  approved  October  6,  1917,  known  as  the  "Trading  with 
the  Enemy  Act,"  and  the  amendment  to  such  act  embodied  in  "An  Act 
making  appropriations  to  supply  urgent  deficiences  in  the  appropriations 
for  the  fiscal  year  ending  June  30th,  1918,  and  prior  fiscal  years  on  account 
of  war  expenses  and  for  other  purposes,"  approved  March  28,  1918,  and 
the  amendment  to  such  act  embodied  in  "An  Act  making  appropriations 
to  supply  deficiencies  in  appropriations  for  the  fiscal  year  ending  June  30, 
1919,  and  prior  fiscal  years  on  account  of  war  expenses  and  for  other  pur- 
poses," approved  November  4,  1918,  to  make  certain  orders  such  as  that 
herein  contained,  and  all  other  powers  and  authorities  me  hereto  enabling, 
I  do  hereby  make  the  following  determination  and  order : 

WHEREAS  by  Orders  dated  February  26,  1919,  and  April  5,  1919, 
made  by  Frank  L.  Polk  under  the  authority  of  Executive  Order  No.  3016 
of  December  3,  1918,  the  Alien  Property  Custodian  was  authorized  to  sell 
and  convey  to  The  Chemical  Foundation,  Inc.,  a  corporation  organized  and 
existing  under  and  by  virtue  of  the  laws  of  the  State  of  Delaware,  certain 
choses  in  action  and  rights,  interests  and  benefits  heretofore  determined 
to  belong  to,  or  to  be  held  for,  by,  or  on  account  of,  or  for  the  benefit  of 
persons  heretofore  determined  to  be  enemies;  and 

WHEREAS  it  was  the  intention  of  the  said  Executive  Orders  to 
authorize  the  said  Custodian  to  sell  and  convey  thereunder,  all  choses  in 
action,  rights,  interests  and  benefits  under  agreements  and  rights  and 
claims  of  every  character  and  description,  including  rights  to  receive 
moneys  by  way  of  royalties  or  otherwise  as  compensation  for  the  use  of 
patents,  trade-marks  or  trade-names,  which  the  Alien  Property  Custodian 
may  have  seized  under  the  provisions  of  the  "Trading  with  the  Enemy 


52 

Act"  as  amended,  and  which  he  had  from  time  to  time  determined  to 
relate  to  the  objects  and  purposes  of  the  said,  The  Chemical  Foundation, 
Inc.,  as  expressed  and  defined  in  its  charter ;  and 

WHEREAS  doubt  has  arisen  as  to  the  authority  of  the  said  Alien 
Property  Custodian  to  sell  and  convey  to  the  said,  The  Chemical  Founda- 
tion, Inc.,  certain  of  the  said  choses  in  action,  rights,  interests,  benefits 
under  agreements,  and  rights  and  claims  including  rights  to  receive 
moneys  by  way  of  royalties  or  otherwise,  as  compensation  for  the  use  of 
patents,  trade-marks  or  trade-names; 

NOW,  THEREFORE,  I,  WOODROW  WILSON,  President  of  the 
United  States  of  America,  do  hereby  in  the  public  interest,  determine  and 
order  that  the  Alien  Property  Custodian  is  hereby  authorized  to  sell  at 
private  sale,  without  public  or  other  advertisement,  to  The  Chemical  Foun- 
dation, Inc.,  a  corporation  organized  and  existing  under  and  by  virtue  of 
the  terms  and  conditions  as  to  the  Alien  Property  Custodian  may  seem 
proper,  all  choses  in  action,  rights,  interests  and  benefits  under  agreements 
and  rights  and  claims  of  every  character  and  description  which  the  Alien 
Property  Custodian  may  seize  or  may  have  seized  under  the  provisions 
of  the  "Trading  with  the  Enemy  Act"  and  the  amendments  thereto  now 
or  hereafter  enacted  and  which  he  from  time  to  time  shall  determine 
relate  to  the  objects  and  purposes  of  the  said  The  Chemical  Foundation, 
Inc.,  as  expressed  and  defined  in  its  charter. 

The  Alien  Property  Custodian  is  also  hereby  authorized  in  the  case 
of  sales  heretofore  made  by  him  of  any  property  which  he  is  hereby 
authorized  to  sell,  but  as  to  which  his  authority  to  sell  the  same  under 
the  said  Orders  of  February  26,  1919,  and  April  5,  1919,  may  be  deemed 
doubtful  to  confirm  and  ratify  the  said  sales  by  the  execution  and  delivery 
of  a  suitable  instrument  of  confirmation. 

My  reasons  for  the  foregoing  determination  and  order  are  stated  in 
the  said  orders  of  Frank  L.  Polk  of  the  26th  of  February,  1919,  and  the 
5th  of  April,  1919 ;  and  in  addition  thereto,  the  public  interest  will  be  best 
served  by  the  elimination  of  any  enemy  interest  adverse  to  American  citi- 
zens arising  by  reason  of  said  choses  in  action,  or  rights,  interests  and 
benefits  under  agreements  and  by  the  devoting  of  any  payments  made  by 
reason  of  said  choses  in  action  or  under  said  agreements  by  THE  CHEM- 
ICAL FOUNDATION,  INC.,  to  the  promotion  of  the  objects  stated  in  its 
charter. 

Done  in  the  District  of  Columbia  this  13th  day  of  February,  in 
the  year  of  Our  Lord  One  Thousand  Nine  Hundred  and 
Twenty,  and  of  the  Independence  of  the  United  States  the 
One  Hundred  and  Forty-fourth. 

WOODROW  WILSON. 


APPENDIX  3. 

ASSIGNMENT. 

WHEREAS,  A.  MITCHELL  PALMER,  formerly  Alien  Property  Cus- 
todian, duly  appointed,  qualified  and  acting  under  the  provisions  of  the 


53 

Act  of  Congress  known  as  the  "Trading  with  the  Enemy  Act,"  approved 
October  6,  1917,  and  the  amendments  thereto  and  the  executive  orders 
and  proclamations  issued  in  pursuance  thereof,  did  during  his  incum- 
bency of  said  office  of  Alien  Property  Custodian  by  virtue  of  requirement 
or  demands  issued  under  his  hand  and  seal  of  office  duly  recorded  in  the 
United  States  Patent  Office,  seize  and  require  to  be  conveyed  to  him 
certain  letters  patent  of  the  United  States  and  applications  for  letters 
patent  of  the  United  States  which  patents  are  enumerated  in  Schedule  A 
hereto  attached,  together  with  every  right,  title  and  interest  with  respect 
thereto  including  all  damages  and  profits  recoverable  at  law  or  in  equity 
from  any  persons,  firm,  corporation  or  government  for  past  infringement 
of  said  letters  patent,  subject  to  the  rights  of  citizens  of  the  United 
States  or  of  friendly  nations  as  stated  in  certain  of  the  requirements  or 
demands  relating  to  said  letters  patent  and  applications  for  letters  patent ; 
and 

WHEREAS,  I,  FRANCIS  P.  GARY  AN,  was  on  the  4th  day  of  March, 
1919,  duly  appointed  and  thereafter  duly  qualified  as  Alien  Property  Cus- 
todian in  succession  of  the  said  A.  MITCHELL  PALMER ;  and  .  * 

WHEREAS,  I,  FRANCIS  P.  GARVAN,  as  Alien  Property  Custodian 
as  aforesaid  by  virtue  of  requirements  or  demands  issued  under  my  hand 
and  seal  of  office  and  duly  recorded  in  the  United  States  Patent  Office  and 
in  the  office  of  the  Register  of  Copyrights  of  the  United  States,  have 
seized  and  required  to  be  conveyed  to  me  certain  letters  patent  of  the 
United  States  and  applications  for  letters  patent  of  the  United  States,  cer- 
tain trade-marks  and  registrations  thereof  and  the  business  and  good- 
will appurtenant  thereto,  and  certain  copyrights  and  certificates  of  regis- 
tration thereof  and  the  works  upon  which  said  copyrights  were  issued 
and  certain  rights,  interests  and  benefits  under  agreements,  all  of  which 
are  included  in  Schedules  A,  B,  C  and  D  hereto  attached  together  with 
every  right,  title  and  interest  with  respect  thereto  including  all  damages 
and  profits  recoverable  at  law  or  in  equity  from  any  person,  firm,  corpora- 
tion or  government  for  the  past  infringement  of  said  letters  patent, 
trade-marks  and  copyrights,  subject  to  the  rights  of  citizens  of  the  United 
States  or  of  friendly  nations  as  stated  in  certain  of  the  requirements  or 
demands  relating  to  said  letters  patent,  applications  for  letters  patent, 
trade-marks,  and  registration  thereof,  copyrights  and  rights,  interests 
and  benefits;  and 

WHEREAS,  by  a  certain  order  bearing  date  the  26th  day  of  February, 
1919,  concerning  the  sale,  transfer  and  release  of  certain  rights  under 
letters  patent,  trade-marks  and  similar  rights  determined  to  belong  to, 
or  to  be  held  for,  or  on  account  of,  or  on  behalf  of,  or  for  the  benefit  of 
persons  determined  to  be  enemies  not  holding  a  license  or  licenses  granted 
by  the  President  within  the  purview  of  the  "Trading  with  the  Enemy 
Act"  and  the  amendment  thereto  and  by  another  certain  order  bearing 
date  the  5th  day  of  April,  1919,  concerning  the  sale,  transfer  and  release 
of  certain  copyrights,  applications  for  letters  patent  and  applications  for 
the  registration  of  trade-marks  and  copyrights  determined  to  belong  to 


54 

or  to  be  held  for,  by,  on  account  of  or  for  the  benefit  of  persons  determined 
to  be  enemies  not  holding  a  license  or  licenses  granted  by  the  President 
within  the  purview  of  the  "Trading  with  the  Enemy  Act"  and  the  amend- 
ments thereto,  both  made  by  Frank  L.  Polk  under  authority  of  executive 
order  of  December  3,  1918,  I  am  empowered  to  sell  such  letters  patent, 
applications  for  letters  patent,  trade-marks  and  registration  thereof,  copy- 
rights and  rights,  interests  and  benefits  under  agreements  to  The  Chem- 
ical Foundation,  Inc.,  a  corporation  duly  organized  and  existing  under  and 
by  virtue  of  the  laws  of  the  State  of  Delaware,  as  I  determine  relate  to 
the  objects  and  purposes  of  the  said  The  Chemical  Foundation,  Inc.,  as 
expressed  and  defined  in  its  charter;  and 

WHEREAS,  I  have  determined  that  the  letters  patent  of  the  United 
States,  applications  for  letters  patent  of  the  United  States,  trade-marks 
and  registration  thereof,  copyrights  and  rights,  interests  and  benefits 
under  agreements  enumerated  in  Schedules  A,  B,  C,  and  D  hereto  annexed 
relate  to  the  objects  and  purposes  of  the  said  The  Chemical  Foundation, 
Inc.,  as  expressed  and  defined  in  its  charter; 

NOW,  THEREFORE,  in  consideration  of  the  sum  of  Two  Hundred 
and  Fifty  Thousand  Dollars  ($250,000.00),  paid  by  the  said  The  Chemical 
Foundation,  Inc.,  receipt  whereof  is  hereby  acknowledged,  I,  FRANCIS  P. 
GARVAN,  as  Alien  Property  Custodian  as  aforesaid,  by  these  presents, 
do  sell,  assign,  transfer  and  set  over  unto  the  said  THE  CHEMICAL 
FOUNDATION,  INC.,  its  successors  and  assigns,  the  whole,  right,  title 
and  interest  acquired  by  me  and  by  said  A.  Mitchell  Palmer,  each  as  said 
Alien  Property  Custodian  as  aforesaid,  in  and  to: 

1.  Each  of  the  letters  patent  of  the  United  States  and  applications 
for  letters  patent  of  the  United  States  enumerated  in  Schedule  A  hereto 
annexed,  together  with  all  claims  and  demands  for  profits  and  damages 
recoverable  at  law  or  in  equity  for  the  past  infringement  of  said  letters 
patent  of  the  United  States  against  every  person,  firm,  corporation,  or  gov- 
ernment except  the  government  of  the  United  States  of  America; 

2.  Each  of  the  United  States  copyrights  and  the  certificates  of  regis- 
tration thereof  and  the  works  upon  which  said  copyrights  were  granted 
enumerated  in  Schedule  B  hereto  annexed,  together  with  all  claims  and 
demands  for  profits  and  damages  recoverable  at  law  or  in  equity  for  the 
past  infringement  of  said  copyrights  against  every  person,  firm,  corpora- 
tion or  government  except  the  government  of  the  United  States  of  America ; 

3.  Each  of  the  trade-marks  and  the  registrations  thereof  enumerated 
in  Schedule  C,  hereto  annexed  and  the  business  and  good-will  appurtenant 
thereto,  together  with  all  claims  and  demands  for  profits  and  damages 
recoverable  at  law  or  in  equity  for  the  past  infringement  of  said  trade- 
marks against  every  person,  firm,  corporation  or  government  except  the 
government  of  the  United  States  of  America; 

4.  All  of  the  rights,  interests  and  benefits  under  the  agreements 
enumerated  in  Schedule  D  hereto  annexed; 

All  as  more  specifically  described  and  set  forth  in  the  requirements 
or  demands  relating  to  said  letters  patent  of  the  United  States,  applica- 


55 

tions  for  letters  patent  of  the  United  States,  trade-marks  and  registrations 
thereof,  copyrights  and  rights,  interests  and  benefits  under  agreements 
issued  by  said  A.  Mitchell  Palmer,  as  Alien  Property  Custodian,  or  by 
me  as  Alien  Property  Custodian  without  any  reservation  or  qualification 
whatsoever,  whether  by  reason  of  anything  contained  in  the  charter  or 
by-laws  of  the  said  The  Chemical  Foundation,  Inc.,  or  otherwise  and 
subject  only  to  the  provisions  of  a  certain  release  to  the  United  States  of 
America,  bearing  even  date  herewith,  and  to  the  rights  of  citizens  of  the 
United  States  or  of  friendly  nations  as  set  forth  in  the  requirements  or 
demands  for  certain  of  said  letters  patent  of  the  United  States,  applica- 
tions for  letters  patent,  trade-marks  and  registrations  thereof,  copyrights 
and  rights,  interests  and  benefits  under  agreements. 

I,  as  Alien  Property  Custodian  as  aforesaid,  do  hereby  request  the 
Commissioner  of  Patents  to  issue  any  letters  patent  granted  upon  any  of 
the  applications  for  letters  patent  enumerated  in  Schedule  A  hereto 
attached  to  The  Chemical  Foundation,  Inc.,  as  the  assignee  of  my  entire 
right,  title  and  interest  therein. 

IN  WITNESS  WHEREOF,  I  have  hereunto  set  my  hand  and  seal  of 
office  this  10th  day  of  April,  1919. 

FRANCIS  P.  GARY  AN, 

Alien  Property  Custodian. 


APPENDIX  4. 

CONFIRMATION    AND   RATIFICATION   OF   CERTAIN    SALES   AND 
CONVEYANCE    IN    CONFIRMATION    AND    RATIFICATION 
OF  THE   SAME  BY  THE  ALIEN   PROPERTY  CUS- 
TODIAN TO  THE  CHEMICAL  FOUNDATION,  INC. 

WHEREAS,'  I,  Francis  P.  Garvan,  as  Alien  Property  Custodian,  and 
my  predecessor  in  the  said  office,  acting  under  the  authority  conferred 
upon  the  Alien  Property  Custodian  by  the  Act  of  Congress  known  as 
"Trading  with  the  Enemy  Act,"  approved  October  6,  1917,  and  the  amend- 
ments thereto,  and  the  executive  orders,  orders  and  proclamations  issued 
in  pursuance  thereof,  did  seize,  by  certain  seizure  orders,  certain  letters 
patent,  application  therefor,  copyrights,  certificates  of  registration  thereof, 
publications  upon  which  such  registrations  were  granted,  trade-marks, 
the  good-will  and  business  pertaining  thereto,  rights,  interests  and  bene- 
fits under  agreements  and  together  with  the  foregoing  certain  rights, 
claims,  demands,  interests  and  choses  in  action  some  of  which  were  con- 
nected with  or  appurtenant  to  the  same;  and 

WHEREAS,  by  the  said  Act  of  Congress,  and  the  amendments  thereto, 
and  by  certain  of  said  orders  dated  respectively  February  26,  1919,  and 
April  5,  1919,  the  Alien  Property  Custodian  was  authorized  to  sell  to 
The  Chemical  Foundation,  Inc.,  a  corporation  organized  and  existing 
under  and  by  virtue  of  the  laws  of  the  State  of  Delaware,  certain  of  the 
said  letters  patent  and  other  property  above  referred  to;  and 


56 

WHEREAS,  I,  Francis  P.  Garvan,  as  Alien  Property  Custodian,  pur- 
suant to  said  authority  vested  in  me,  for  valuable  consideration  and  at 
such  places  and  upon  such  terms  and  conditions  as  to  myself,  as  Alien 
Property  Custodian,  seemed  proper,  did  sell  to  said  The  Chemical  Foun- 
dation, Inc.,  at  private  sale  without  public  or  other  advertisement  certain 
of  the  said  letters  patent  and  other  property,  which  letters  patent 
and  other  property,  I,  as  Alien  Property  Custodian,  from  time  to  time 
determined  to  relate  to  the  objects  and  purposes  of  said  The  Chemi- 
cal Foundation,  Inc.,  as  expressed  and  defined  in  its  charter,  and  in 
effectuation  of  the  said  sales  did  execute  and  deliver  to  said  The  Chemi- 
cal Foundation,  Inc.,  certain  assignments  in  writing,  in  which  assign- 
ments the  patents,  applications  therefor,  copyrights,  and  trade-marks 
assigned  are  enumerated,  and  which  assignments  are  dated  and  recorded 
as  follows: 

(1)  Assignment  dated  April  10,  1919,  recorded  as  to  patents,  applica- 
tions therefor  and  trade-marks  in  the  United  States  Patent  Office  on  April 
21,  1919,  in  Liber  Y  107,  page  1  of  Transfer  of  Patents  and  recorded  as 
to  copyrights  in  the  Library  of  Congress,  Copyright  Office,  on  April  15, 
1919,  in  Copyright  Office  Book  81,  pages  181  to  186. 

(2)  Assignment  dated  May  2,  1919,  recorded  in  the  United  States 
Patent  Office  on  May  21,  1919,  in  Liber  J  107,  page  152  of  Transfers  of 
Patents. 

(3)  Assignment  dated  May  6,  1919,  recorded  in  the  United  States 
Patent  Office  on  May  21,  1919,  in  Liber  A  107,  page  229  of  Transfers  of 
Patents. 

(4)  Assignment  dated  May  15,  1919,  recorded  in  the  United  States 
Patent  Office  on  May  21,  1919,  in  Liber  X  107,  page  188  of  Transfers  of 
Patents. 

(5)  Assignment  dated  June  17,  1919,  recorded  in  the  United  States 
Patent  Office  on  June  27,  1919,  in  Liber  L  107,  page  242  of  Transfers  of 
Patents. 

(6)  Assignment  dated  June  21,  1919,  recorded  in  the  United  States 
Patent  Office  on  July  10,  1919,  in  Liber  H  107,  page  259  of  Transfers  of 
Patents. 

(7)  Assignment  dated  October   17,   1919,   recorded  in  the  United 
States  Patent  Office  on  November  14,  1919,  in  Liber  P  108,  page  441  of 
Transfers  of  Patents. 

(8)  Assignment  dated  December  9,   1919,  recorded  in  the  United 
States  Patent  Office  on  December  19,  1919,  in  Liber  Z  109,  page  69  of 
Transfers  of  Patents. 

(9)  Assignment  dated  February  26,  1920,  recorded  in  the  United 
States  Patent  Office  on  December  21,  1920. 

(10)  Assignment  dated  February  26,  1920,  recorded  in  the  United 
States  Patent  Office  on  December  21,  1920. 


57 

(11)  Assignment  dated  March  9,  1920,  recorded  in  the  United  States 
Patent  Office  on  March  11,  1920,  in  Liber  X  108,  page  435  of  Transfers 
of  Patents. 

(12)  Assignment  dated  -May  4,  1920,  recorded  in  the  United  States 
Patent  Office  on  May  20,  1920,  in  Liber  X  109,  page  199  of  Transfers 
of  Patents. 

(13)  Assignment  dated  May  15,  1920,  recorded  in  the  United  States 
Patent  Office  on  November  1,  1920,  in  Liber  E  111,  page  319  of  Transfers 
of  Patents. 

(14)  Assignment  dated  July  20,  1920,  recorded  in  the  United  States 
Patent  Office  on  July  27,  1920,  in  Liber  B  111,  page  66  of  Tranfers  of 
Patents. 

(15)  Assignment  dated  December  21,  1920,  recorded  in  the  United 
States  Patent  Office  on  December  21,  1920. 

(16)  Assignment  dated  December  21,  1920,  recorded  in  the  United 
States  Patent  Office  on  December  21,  1920. 

(17)  Assignment  dated  December  21,  1920,  recorded  in  the  United 
States  Patent  Office  on  December  21,  1920. 

(18)  Assignment  dated  December  21,  1920,  recorded  in  the  United 
States  Patent  Office  on  December  21,  1920. 

(19)  Assignment  dated  February  19,  1921,  recorded  in  the  United 
States  Patent  Office  on  February  23,  1921. 

And 

WHEREAS,  it  was  the  intention  of  myself  as  Alien  Property  Cus- 
todian and  of  said  The  Chemical  Foundation,  Inc.,  in  agreeing  upon  the 
said  sales  and  in  executing,  delivering  and  receiving  the  said  assignments 
that  the  said  assignments  should  assign  and  convey  to  said  The  Chemical 
Foundation,  Inc.,  not  only  the  letters  patent  and  other  property  specifically 
referred  to  in  and  assigned  by  the  said  assignments,  but  also  with  such 
exceptions  as  are  specifically  stated  in  said  assignments,  all  rights,  claims, 
demands,  interests  and  choses  in  action  of  every  character  and  descrip- 
tion acquired  by  the  Alien  Property  Custodian  by  virtue  of  the  seizures 
whereby  the  said  letters  patent  and  other  property  were  seized;  and 

WHEREAS,  doubt  has  arisen  as  to  whether  the  language  of  the  said 
assignments  is  in  fact  and  in  law  sufficient  and  effectual  to  carry  out 
the  true  intent  and  purpose  aforesaid  of  the  said  sales  and  to  assign  and 
convey  to  said  The  Chemical  Foundation,  Inc.,  all  of  the  said  rights,  claims, 
demands,  interests  and  choses  in  action  acquired  by  the  Alien  Property 
Custodian  as  aforesaid:  and 

WHEREAS,  doubt  has  arisen  as  to  the  authority  of  the  Alien  Prop- 
erty Custodian  to  sell  and  convey  to  the  said  The  Chemical  Foundation, 
Inc.,  certain  of  the  said  choses  in  action,  rights,  interests,  benefits  under 
agreements,  and  rights  and  claims  including  rights  to  receive  moneys  by 
way  of  royalties  or  otherwise,  as  compensation  for  the  use  of  patents, 
trade-marks,  or  trade-names ;  and 


58 

WHEREAS,  in  one  of  the  above  mentioned  executive  orders,  the  same 
being  dated  February  13,  1920,  among  other  things  it  is  recited  that  it 
was  the  intention  of  the  above  mentioned  orders  dated  February  26,  1919, 
and  April  5,  1919,  respectively,  to  authorize  the  Alien  Property  Custodian 
to  sell  and  convey  thereunder,  all  choses  in  action,  rights,  interests  and 
benefits  under  agreements  and  rights  and  claims  of  every  character  and 
description  including  rights  to  receive  moneys  by  way  of  royalties  or 
otherwise  as  compensation  for  the  use  of  patents,  trade-marks,  or  trade- 
names,  which  the  Alien  Property  Custodian  may  have  seized  under  the' 
provisions  of  the  "Trading  with  the  Enemy  Act"  as  amended,  and  which 
he  had  from  time  to  time  determined  to  relate  to  the  object  and  purposes 
of  said  The  Chemical  Foundation,  Inc.,  as  expressed  and  defined  in  its 
charter;  and 

WHEREAS,  the  Alien  Property  Custodian  is  authorized  by  said 
executive  order  dated  February  13,  1920,  to  sell  at  private  sale,  without 
public  or  other  advertisement,  to  said  The  Chemical  Foundation,  Inc.,  at 
such  place  and  upon  such  terms  and  conditions  as  to  the  Alien  Property 
Custodian  may  seem  proper,  all  choses  in  action,  rights,  interests  and 
benefits  under  agreements  and  rights  and  claims  of  every  character  and 
description  which  the  Alien  Property  Custodian  may  seize  or  may  have 
seized  under  the  provisions  of  the  "Trading  with  the  Enemy  Act"  and 
the  amendments  thereto,  then  or  thereafter  enacted  and  which  he  from 
time  to  time  shall  determine  relate  to  the  objects  and  purposes  of  the  said 
The  Chemical  Foundation,  Inc.,  as  expressed  and  defined  in  its  charter ;  and 

WHEREAS,  the  Alien  Property  Custodian  is  also  authorized  by  said 
Executive  Order  dated  February  13,  1920,  in  the  case  of  sales  theretofore 
made  by  him  of  any  property  which  he  is  authorized  to  sell  by  virtue  of 
said  executive  order  dated  February  13,  1920,  but  as  to  which  his  author- 
ity to  sell  the  same  under  the  said  orders  of  February  26,  1919,  and  April 
5,  1919,  may  be  deemed  doubtful  to  confirm  and  ratify  the  said  sales  by 
the  execution  and  delivery  of  a  suitable  instrument  of  confirmation ; 

NOW,  THEREFORE,  I,  FRANCIS  P.  GARY  AN,  as  Alien  Property 
Custodian,  by  virtue  of  the  authority  conferred  upon  me  by  said  "Trading 
with  the  Enemy  Act,"  as  amended,  and  by  the  executive  orders,  orders 
and  proclamations  issued  in  pursuance  thereof,  do  hereby  for  the  purpose 
of  effectuating  the  true  intent  of  the  parties  to  said  assignments  confirm 
and  ratify  the  sale  and  assignment  to  said  The  Chemical  Foundation,  Inc., 
of,  and  do  hereby  for  valuable  consideration  heretofore  received  by  me, 
sell,  assign,  transfer  and  set  over  to  said  The  Chemical  Foundation,  Inc., 
all  property,  including  (but  not  thereby  limiting  the  generality  of  the 
foregoing)  letters  patent,  rights  under  letters  patent,  applications  for 
letters  patent  and  rights  thereunder,  copyrights,  rights  under  copyrights, 
certificates  of  registrations  thereof,  the  publications  upon  which  such 
registrations  were  granted,  trade-marks,  rights  under  trade-marks, 
together  with  the  good-will  and  business  pertaining  thereto,  including  all 
profits  and  damages  recoverable  at  law  or  in  equity  for  past  infringement 
with  respect  to  any  and  all  of  the  foregoing,  choses  in  action,  rights,  inter- 
ests and  benefits  under  agreements,  and  rights  and  claims  of  every  char- 


59 

acter  and  description  with  respect  to  all  of  the  foregoing,  seized  by  me 
as  Alien  Property  Custodian,  or  by  my  predecessor  in  such  office  specifi- 
cally referred  to  in  and  assigned  by  said  assignments,  and  I  do  hereby 
confirm  and  ratify  the  sale  and  assignment  of  and  do  hereby  sell,  assign, 
transfer  and  set  over  to  said  The  Chemical  Foundation,  Inc.,  all  choses 
in  action,  rights,  interests  and  benefits  under  agreements,  and  rights  and 
claims  of  every  character  and  description  growing  out  of  and  appurtenant 
to  the  ownership  of  said  property,  including  (but  not  thereby  limiting  the 
generality  of  the  foregoing)  rights  to  receive  moneys  by  way  of  royalties 
or  otherwise  as  compensation  for  the  use  of  patents,  copyrights  and  trade- 
marks, and  all  right,  title  and  interest  in  and  to  the  choses  in  action  and 
the  funds  referred  to  in  Section  10,  Sub-section  (f )  of  the  "Trading  with 
the  Enemy  Act"  as  amended,  acquired  by  the  Alien  Property  Custodian 
by  virtue  of  the  seizures  by  which  there  were  seized  patents,  copyrights, 
or  trade-marks,  under  which  a  license  had  theretofore  been  granted  in 
accordance  with  the  provisions  of  Section  10,  Sub-section  (c)  of  said  Act 
as  amended,  all  of  which  property  I,  as  Alien  Property  Custodian,  from 
time  to  time  have  determined  and  do  hereby  determine  to  relate  to  the 
objects  and  purposes  *of  said  The  Chemical  Foundation,  Inc.,  as  expressed 
and  defined  in  its  charter ;  the  intent  and  purpose  of  this  instrument  being 
to  vest  in  said  The  Chemical  Foundation,  Inc.,  every  right,  title,  interest, 
claim  and  demand,  save  as  such  as  are  specifically  excepted  in  and  by  the 
said  assignments,  acquired  by  the  Alien  Property  Custodian  by  virtue  of 
the  seizures  whereby  the  said  property  was  seized. 

IN  WITNESS  WHEREOF,  I  have  hereunto  set  my  hand  and  seal  of 
office  this  1st  day  of  March,  1921. 

FRANCIS  P.  GARVAN, 

Alien  Property  Custodian. 


APPENDIX  5. 
PATENT  CONVENTION. 

Concluded  February  23,  1909 ;  ratification  advised  by  the  Senate  April 
15,  1909 ;  ratified  by  the  President  April  20,  1909 ;  ratifications  exchanged 
July  14,  1909 ;  proclaimed  August  1,  1909. 

ARTICLES. 

I.    Reciprocal  rights, 
n.     Time  of  taking  effect;  duration. 
m.     Ratification. 

The  President  of  the  United  States  and  His  Majesty  the  German 
Emperor,  King  of  Prussia,  in  the  name  of  the  German  Empire,  led  by  the 
wish  to  effect  a  full  and  more  operative  reciprocal  protection  of  patents, 
designs,  working  patterns,  and  models  in  the  two  countries,  have  decided 
to  conclude  an  agreement  for  that  purpose  and  have  appointed  as  their 
Plenipotentiaries : 


60 

The  President  of  the  United  States  of  America,  Mr.  Robert  Bacon, 
Secretary  of  States  of  the  United  States;  and 

His  Majesty  the  German  Emperor,  King  of  Prussia,  His  Excellency 
Count  von  Bernstorff,  His  Ambassador  Extraordinary  and  Plenipotentiary 
to  the  United  States; 

Who,  after  having  communicated  each  to  the  other  their  respective 
full  powers,  found  to  be  in  good  and  due  form,  have  agreed  to  the  fol- 
lowing articles: 

ARTICLE  I. 

The  provisions  of  the  laws  applicable,  now  existing  or  hereafter  to 
be  enacted  of  either  of  the  contracting  parties,  under  which  the  non- 
working  of  the  patent,  working  pattern  (Gebrauchsmuster),  design  or 
model  carries  the  invalidation  or  some  other  restrictions  of  the  right, 
shall  only  be  applied  to  the  patents,  working  patterns  (Gebrauchsmuster), 
designs  or  models  enjoyed  by  the  citizens  of  the  other  Contracting  Party 
within  the  limits  of  the  restrictions  imposed  by  the  said  Party  upon  its 
own  citizens.  The  working  of  a  patent,  working  pattern  (Gebrauchs- 
muster), design,  or  model  in  the  territory  of  one  of  the  Contracting 
Parties  shall  be  considered  as  equivalent  to  its  working  in  the  territory 
of  the  other  Party. 

ARTICLE  II. 

This  agreement  shall  take  effect  from  the  date  of  its  promulgation 
and  remain  in  force  until  the  expiration  of  12  months  following  the 
notice  of  termination  given  by  one  of  the  Contracting  Parties. 

ARTICLE  III. 

The  present  Agreement  shall  be  ratified  and  the  ratifications  shall  be 
exchanged  at  Washington  as  soon  as  possible. 

In  witness  whereof  the-  respective  Plenipotentiaries  have  executed 
the  present  Agreement  and  affixed  their  seals  thereunto. 

Done  in  duplicate  in  the  English  and  German  languages  at  Wash- 
ington this  23rd  day  of  February,  1909. 

ROBERT  BACON  (Seal). 
J.  BERNSTORFF  (Seal). 


SOUTHERN  BRANSH, 

UNIVERSITY  OF  CALIFORNIA, 

LIBRARY, 

i  OS  AMBLES,  CALIF/ 


I 


